That’s important in what follows. That’s because YouGov has reported that:
A survey of senior decision-makers at British businesses shows that a third (32%) say their company will have to let workers go before the end of the year, including 12% who plan to shed a fifth or more of their staff.
The message is loud and clear. It is that far from the economic crisis being over, once government support ends there is going to be a significant increase in unemployment in the UK. That is something I have predicted for a long time.
And I, and YouGov, and all those companies, could be wrong of course. But in the meantime the data findings are worrying. That’s not least because large companies are planning the largest redundancies, with half expecting to lay people off and a sixth expecting to make more than 20% of their staff redundant.
Smaller companies are more optimistic. Only a fifth expect to make redundancies with only 9% thinking more than 20% of their staff will be sacked.
Myself I’d go with basic ignorance as the problem here.
These are the numbers for job turnover. Not for unemployment, but for the flow through that state. Can’t be bothered to find the UK numbers but for the US – 5 to 6 million people leave jobs each month – some 3% of the 160 million workforce. About half that is quits, people leaving voluntarily for a new job. Half redundancies, firings, as companies change plans, downsize and all that. Some 5 to 6 million people get hired each month too. Which is why unemployment doesn’t rise by 6 million a month.
Further, among economists at least, it is well known that large companies tend to shed labour over time. Jobs growth comes from smaller companies on their way to becoming larger companies.
No, I’m not going to do the work to recast 32% saying they’ll fire a few workers into monthly numbers for firings. But you do see the problem here, don’t you?
The economy is always firing workers, larger companies more than smaller. Thus opinion poll evidence that workers will get fired, larger companies doing more of this than smaller, is not in fact a grand revelation. It’s normality. It’s also not proof that unemployment is going to rise – to determine the stock of unemployed we have to consider the flow out of that state as well as the one into it.
The reason the P³ doesn’t know all of this is simply that the P³ is ignorant upon the subject. But then it’s economics so we already knew that, right?