Bankers were accused of \”sticking two fingers up to austerity Britain\” after it was revealed that Goldman Sachs had handed its staff a £10bn payday as new figures showed unemployment among Britain\’s young people had hit its highest level since modern records began.
Data from the Office for National Statistics showed that one in five people under 25 were out of work by the end of November last year – a total of 951,000.
Meanwhile, the Wall Street bank Goldman Sachs\’s announcement that its employees – 6,000 of whom work in the City – earned an average of $430,000 (£268,000) in pay and bonuses in 2010, prompted calls from Labour for a repeat of Alistair Darling\’s City bonus tax.
Youth unemployment: yes, we\’re in bad economic times and it will be the young and untrained, those with the lowest productivity, who get shafted.
It\’s also an entirely normal part of the economics of the minimum wage that it will be the young and the untrained, those with the lowest productivity, who will get shafted. So what we\’re seeing happening to youth unemployment is exactly what we would expect to be happening from the introduction of a minimum wage: don\’t forget, this is the first major recession since its introduction.
I wouldn\’t go so far as to say this proves the minimum wage is therefore a bad idea (although I obviously think it is) but the evidence before uas is indeed consitent with that position, that it is a bad idea.
But what\’s the connection between this and bankers\’ bonuses? Are we supposed to think that if bankers weren\’t getting the dosh then lots of young people would then find jobs? How would that work?
Isn\’t it actually the other way around? Firstly there\’s the 50% take the taxman gets of that dosh. But also, as good little Keynesians, we want money to move from where there is a low propensity to spend to where there is a higher one. You know, a little bit of boosting of aggregate demand?
And given that the corporate sector is stuffed with cash at present, moving money from a corporate to the employees of it will certainly increase the likelihood that that money is spent.
So as I say, I don\’t really get it: unless it\’s all just political. Look at the poor youth, look at the gilded excesses of the usurers. And policy should be based on more than that, surely?