Unemployment in the UK has risen to 5.2%, the highest level in nearly five years, while wage growth continues to slow, raising the prospect of another cut to interest rates in the spring.
As we kept saying. Raise the minimum wage, increase taxes on employing people, unemployment will rise.
Did you listen? Nooooo, you didn’t did you?
Lowering interest rates won’t solve this either. So, a bt of actual economics.
Sure, lower interst rates, get more economic activity. Or at least, some stimulus to activity. Dependent upon varied things that might turn up as actual growth or just growth in prices – inflation.
So, the varied things. That microeconomic structure of the economy matters. What is the prie of labour? The risk of hiring it? The rewards to having hired it? All the laws you’ve got about taxation of those who succeed, the taxation of those trying, the bureaucratic rules that apply to people trying, the costs of doing so etc. They will determine how much of the stimulus turns up as that growth – and thus hiring – and how much will turn up as inflation.
This is the same idea – tho’ a different view of it – as Nairu, the non accelerating inflation rate of unemployment. That depends upon the microstructure of the employment market. Sure, sure, lower interest rates will stimulate but how that stimulus will express itself depends upon that microstructure.
We can even go further. Have a very liberal – in the classical liberal sense – microstructure and you can lower interrest rates more before you get inflation. Because more of your stimulus will turn up in growth and less in inflation. Equally, you can have more employment before you get inflation.
This is one of the areas where Spud goes wrong but he’s not the only one. Let’s all play with macroeconomics! OK, sure – but you’ve got to grasp that microeconomics defines – defines, note – how effective any of those macroeconomic tools are going to be. In vernacular, sure there are levers to pull but the details of what the levers are connected to matter.
Despite what they claim the Labour Party have never been that interested in the unemployed. Their paymasters are the unions and the unions are there to benefit their members, hence their demands for minimum wages and increasing worker protection and if they could they’d go back to the closed shop.
The unemployed are the responsibility of the tax payer and that should mean the rich, but as they are now finding out the rich is having to mean higher taxes for the middle and even lower middle classes.
This circle isn’t going to get squared by this government and I don’t see another politician with Thatcher and Joseph’s clarity of thinking and determination on the horizon.
Drive at 28mph in a London street where the limit imposed by our Paki antin-semite is 20mph and you get fined to stop you doing it. Employ someone and you get fined for…
Absolutely Grist.
The same way they impose ‘sin taxes’ to get people to stop smoking / drinking / anything else they can think of that they don’t want you to do, yet are oblivious to the notion that imposing taxes on workers will lead to fewer workers…….
There are nearly 10 million working age people on ‘out-of’work’ benefits. How is that an unemployment rate of 5%?
IIRC the 5% is those actively looking for work. The 10 million just pull the duvet over their heads for a snooze before getting up in time for the Jeremy Kyle (or whatever daytime telly is called in 2026) show.
So, isn’t it closer to the truth to say that we have an effective unemployment rate of nearly one-third?
(working age population is officially 37.5m. Dole recipients at 5% of that = 1,875m. Plus about 10m on ‘o-o-w bennies. Grand total = 11,875m. That is nearly 32 per cent of the working age population).
Perhaps we always have. Might this be the means by which women are removing themselves from the workforce again? How many of the “anxious” are useless, miseducated, fat young women?
Might this be the means by which women are removing themselves from the workforce again?
That might be part of it but I’m buggered if I can see why I should pay for it. If they can find a husband to support them, fine. If not, tough.
You can change the perception of reality by reclassification. This is the favourite trick of pollies and bureaucrats who live and die by “the narrative”. Their problem is that you can only fool all of the people some of the time. The some of the people they fool all of the time include themselves.
Exactly.
That’s why the raised the school leaving age to 15, 16 and for all intents and purposes 18. Sending half 18YOs to uni helps fiddle the numbers as well.
Other tricks in the past included signing off on long term sick and now they don’t even pretend when it comes to modern afflictions like anxiety and other mental health claims.
I can’t remember where I saw it, but Labour have said they now want 75% of 18-year-olds in education.
DT reckons that male unemployment is at least a percent above women. Men are in ruffty-tufty private sector jobs; women in the public sector. Here’s the interesting bit:
As the Government ramps up spending, more jobs are being created in those sectors with a large share of female staff, which tend to be in the public sector, even as men struggle in an economy hammered by tax rises and tougher regulations. However, a surge in public sector spending has failed to generate an equivalent rise in productivity. Spending on public services has risen by more than 20pc since 2019, but output is up only 14pc over the same period, official figures show.
Manufacturing – an industry traditionally almost three-quarters male – has lost 41,000 jobs since the Rachel Reeves’ first Budget, according to payroll tax data. Retail, wholesale and car garages have lost 74,000. Hospitality, which once had a largely female workforce but is now more evenly split, is down 63,000. Meanwhile, the public sector has added 42,000 new NHS jobs, alongside 32,000 more in public administration and 14,000 more roles in education.
This gender gap begins early: 19pc of men aged 16 to 24 are now unemployed, the highest rate since 2014. That compares to 13.1pc of women of the same age.
All of this has happened even as the number of inactive women plunges. There were just under 5.3 million economically inactive women of working age at the end of last year, down by almost 200,000 on the year. Most of that fall came from a drop in the number of women who are looking after family or the home.
Maybe we shouldn’t be encouraging third worlders (plus their dependants) over here to work for modest salaries safe in the knowledge that tax credits and state benefits will more than compensate. Then make the situation worse by allowing more and more dubious disability claims enabling people to have a passable lifestyle without doing a days work.
I think Sir Jim Ratcliffe said something almost identical.
The leader of Prospect Union says that regulators are “builders not blockers” in job creation. Seems to put me in memory of Ms Mandy Rice-Davies somewhat….