The UK media got their collective knickers in a twist today about a rise in those claiming unemployment benefit. The FT said that the rise ‘fuelled fears that the recovery has run out of steam’. Setting aside the fact (yawn) that there never was a recovery, the miniscule size of the actual number involved (2,300 net) would suggest that even at an annualised growth-rate, we’re talking peanuts in the greater scheme of things.
But a closer look at today’s ‘surprise’ ONS numbers (everything is a surprise to the Establishment) might suggest that the increase makes perfect sense. This is because there were two reports out today – one on public sector employment, and the one everybody leapt on – the overall employment/claimant rate changes.
The first of those shows that public sector employment fell by 22,000 in the preceding quarter. The biggest area of decrease was education (as you’d expect) where 11,000 opportunities were lost. Education is one of the few sectors where women outnumber men. The overall second lot of statistics show that male claimants fell – but female claimants rose by a total of 5,000. Public sector women are, I would contend, far more likely to seek benefit than private sector men; but whether you accept that attitudinal generalisation or not, a 22,000 fall in public sector jobs evoking an unemployment claimant increase of under 10% of that is by any measurement a result….in financial terms.
In looking for shock-horror, most papers and sites also skipped two other crucial numbers.
First, the total number of UK vacancies is still 470,000. Or put more bluntly, for every three unemployed claimants, there is still one job going. Until that relationship improves, George Osborne is entirely justified in calling for benefit cuts.
Second – and related to that last point – a Slog posting of 31st August about the 16-64 total inactivity rate suggested that not all these inactive folks were pulling their weight. Today, there was a dramatic decrease in this number by 158,000 – the largest fall since 1984. Once again, to my mind this shows market forces at work: fear of lower benefits and austerity alone have been enough to persuade a staggering number of people to cut themselves free of the sofa and get a job.
If that rate of activity increased without any acceleration whatsoever, all the job vacancies would be filled by next Spring. For a Government being hounded by the Left for ‘creating unemployment’, that’s not a bad start.
Being a chap of moderate views on the whole (despite being Dubbed Right Wing by the new Blog League Table) it still remains true that the lives being buggered about by econ-fiscal events are innocent victims of what I call the 2B or not 2B syndrome: yes, Brown blew all the dosh, but so did the Bankers. As my Great Aunt Lizzie used to say, “And a right silly pair of B’s they were”.
In short, I’d feel better about these figures if there were circa 22,000 bankers in jail – as there should be. But while bankers and Brown were the Crazy Gang after 2004, so too we have grown a Lazy Gang. The Coalition is setting the lazy part straight; what it should do is take more action to dissuade any future crazies.