Public Sector employment will always be kept high

Unemployment is at its highest in the last 20 years and is expected to rise. That is a great bit of material for Labour. It is the sort of line they can trot out in any interview and it has the added value of being true. It also appeals to those with a visceral hatred of Tories, thus, keeping Labour supporters in a convenient, windowless box. For Labour voters are generally stupid. They typically believe in free everything for everybody and if they are unemployed Labour voters they can draw their benefits without referring to their consciences.

There are however a lot of details in the headline. For a start, the number of people on state benefits has reduced. The claimant count in February stood at 1, 450,000 - down by 128,000 on the year. There has also been an increase in private sector jobs. A significant portion of the job losses, not necessarily redundancies but simply not replacing natural wastage, was in the public sector, well before the Coalition government took over.

Yes, it was a Labour government that has been responsible for the majority of job losses in the public sector - in the year ending December 2010, the public sector workforce was reduced by 123,000.

There is a distorting effect to consider, of youth non-employment, and by "youth" it is defined here as the 18-24 age group. John Philpott, Chief Economic Adviser at the CIPD said of this sector:

1 in 8 young people in this age group are unemployed and almost 30% of those classified as unemployed are full-time students.

A number of things strike me here. The first is that if 30% of people classified as unemployed are in fact full-time students, then the truth of the situation becomes clear; the creation of non degrees and daft qualifications has been an industry in itself and has had the effect of massaging the figures for some time.

The second is that Labour were quietly dumping public sector jobs during 2010. I would like to know what these are and in what parts of the public sector these came from.

Obviously experts can be picked to back up a point but they almost all agree that it is youth unemployment that is the biggest cause for concern. Almost all agree that the private sector cannot be expected to mop up this large reservoir of unemployed youth.

It seems an intractable problem, but there is more bad news. Labour kept themselves in power almost entirely on the back of a public sector jobs boom. In 2003, Labour was creating jobs at four times the rate of the private sector, inflating it to 5.3 million. And that was in 2003. In 2008, the increase was massive, due mostly to the official figures reflecting the government's aquisition of RBS and Loyds, in the wake of the banking crisis. By 2010 the figure was 6.195 million.

Unfortunately the picture is not as clear cut for the Tories. They too depended heavily on an inflated public sector, and despite all the claims, public sector employment peaked at a 13% increase during the Labour administration and began to decrease long before the change of government.

The simple fact, the only real fact I can deduce from all of this is that all governments are spending our money on preventing an employment meltdown, largely by keeping the inflated public sector in business, which means that those who work in the private sector are paying to keep the government popular and in power, regardless of political pursuasion.

1 comment:

Ed P said...

And I would like to know what Red Ed means when he spouts off about economic recovery and public sector job preservation in the same breath. It needs to be said to all Labour supporters, "Public sector jobs do not improve the economy - they are a parasitic burden on it."