Cable, the public\’s current choice for chancellor, according to polls, said it was highly plausible that as many as 120,000 public sector jobs would have to be lost, and suggested that voters were \”in for a nasty shock\”.
Gosh, that is a shock isn\’t it? If there are 6 million public sector workers (a little on the low side but the right order of magnitude) then we\’re talking of a whole 2% of the public sector workforce.
Which is, err, around and about the average annual productivity improvement in the economy as a whole. In order to stand still therefore we would expect any organisation (well, yes, I know, national averages don\’t quite translate to individual companies: productivity tends to grow in leaps and spurts in certain industries or firms rather than generally across everyone but still…when we average up over 6 million people it\’s rather more fair) to be reducing its headcount by 2% a year while providing exactly the same output.
These 2% of people pushed out by rising productivity go off and do something else which means that we\’ve all got the new production of these 2% of people each year to enjoy which is what makes us all richer.
So this \”nasty shock\” is in fact just what we expect (and observe actually) private business to do year in and year out without breaking into a sweat. Increase the productivity of the labour force.
Shows quite how insulated the public sector is if this is a \”shock\” really.