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Unemployment figures show austerity isn’t working

February 15, 2012 2:00 pm

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Today marks the three year anniversary of unemployment breaking the 2 million mark, and figures out today show the 8th consecutive month of rising unemployment. Unemployment jumped by 48,000 in the quarter to December to 2.67 million, a jobless rate of 8.4%, the worst figure since the end of 1995.

The Government’s austerity plan is not working

Private sector jobs have only risen by 5,000 but cuts in public sector employment, for the same period are 67,000 in the latest quarter (June to September). As women are more likely to be working in the public sector it has had a devastating impact on women’s employment. The number of women claiming job seekers allowance increased by 1,500 last month to 531,700, the highest figure since the summer of 1995.

Paul Kenny, general secretary of the GMB, said:

“As it is clear that austerity and deflation as a policy is not working, it is both surprising and shocking that there are so few demands from Tory backbenches, from the CBI, from the City and from the Liberal and Labour parties that the policy be abandoned in favour of sure fire ways of getting people back to work.”

Youth unemployment:

Other data from the Office for National Statistics showed a 22,000 increase in youth unemployment to 1.04 million, which includes 307,000 in full-time education who were looking for work. Of those, 247,000 young people (aged 16-24) have been unemployed for more than a year – the longer someone is unemployed, the less likely they are to ever return to work. Being out of work for more than a year can have a scarring effect, making it harder to get a job as well as having a negative impact on one’s health and well-being. This means that even when employment starts to pick up again, they will find it hard to compete with other jobseekers and could find themselves permanently shut out of the jobs market.

Graeme Cooke, IPPR Associate Director, said:

“The government should guarantee everyone who has been unemployed for more than a year a job at the minimum wage in local government or the voluntary sector. But with that right should come the responsibility to take that job or risk losing their benefits.”

Underemployment:

There are also 600,000 more people working part-time who say they want to work full-time, compared to three years ago. A record number of people are working part-time because they cannot find full-time jobs – up by 83,000 over the latest quarter to 1.35 million. Employment increased by 60,000 to 29 million, mainly due to a rise of 90,000 in the number of part-time employees to 6.6 million.

North-South divide:

As I blogged last week the recession has widened the North-South divide and IPPR North analysis shows the number of unemployed people compared to a year ago is:

• up 25% in the North East (31,000 more people unemployed)

• up 16.9% in the North West (44,000 more people unemployed)

• up 11.6% in Yorkshire and Humber (23,000 more people unemployed)

It is clear that the government’s austerity plan is failing and we need growth and jobs not just for the economy but for young people’s futures too. It is a scandal that over 1 million young people have been thrown onto the unemployment scrap heap and their futures are being scarred by a failing political ideology.

Next Generation Labour is hosting a meeting on Tuesday 21 February “Austerity isn’t working: progressive alternatives to Tory slash and burn” with speakers including Katy Clark MP; Owen Jones, author of Chavs; Anna Bird, Fawcett Society; Richard Murphy, author of The Courageous State; Prof George Irvin, economist; Ellie Mae O’Hagan, writer and UK Uncut activist and chaired by Cat Smith, Next Generation Labour. To find out more and RSVP – click here.

Related posts:

  1. Unemployment – vital statistics
  2. We face an unemployment emergency
  3. Unemployment – a Welsh solution
  4. Yvette Cooper: Unemployment figures are “very worrying”
  5. Balls responds to GDP growth figures
  • Anonymous

    It is a great tragedy that unemployment is rising.  But it does not follow that the government’s policies are not working.

    The number of those working has also risen, albeit not as fast.  As the BBC report today: “The number of people in jobs went up by 60,000 in the last three months of the
    year to 29,13 million.”

    And the number of job vacancies has risen too: up to 476,000 in January.

    • http://twitter.com/gonzozzz dave stone

      Yes, we’ve come a long way from the starry-eyed predictions of 2010 when it was claimed 2012 would bring us to the sunny uplands with growth at 2.8%.

      And this morning Mervyn King of the Bank of England predicts growth for this year will follow a 
       “zig-zag” pattern of alternating positive and negative quarterly growth rates.”

      If that doesn’t mean the government policies aren’t working then I’m Father Christmas.

      • Anonymous

        At least part of the reason for the present stop-start economy is the Euro crisis.  The risk of a collapse of the Euro has had very significant effects on bank solvency and so on their ability to lend.  The downturn in growth in Euroland (not just here) also impacts on our growth and confidence.

        But the government could and should be making supply-side reforms to get our labour market nearer to that of the USA, for example.

        • http://twitter.com/gonzozzz dave stone

          No harm would be done if Osborne took a leaf out of Obama’s book and took a look Francois Hollande’s proposals for France.
          Can’t see that Osborne has the wit or wisdom though, he’s nonsensically ideological.

          Two factors hamper growth at the moment: the Euro-wide austerity frenzy and Osborne’s incompetence.

          One now understands why Osborne’s most recent proper job, prior to politics, was as a towel folder in a department store.

          He’s not fit for much else.

          • Anonymous

            But President Obama is cutting faster than Mr Osborne: http://www.spectator.co.uk/coffeehouse/7649898/how-obamas-new-budget-fits-into-the-uk-debate.thtml

          • http://twitter.com/gonzozzz dave stone

            Does Osborne get his strategy from the Spectator? Heaven help us!

            Someone pass him a pile of towels, quick.

            http://thinkprogress.org/economy/2012/02/13/424283/gop-budget-austerity-debunk/

          • girlguide

            Francois Hollande is proposing a tax rate of 45% on those earning more than 150,000 euros, eradicating the deficit by 2017, decreasing company taxes for most businesses except the very largest, and although he proposes increasing the number of teachers and some jobs for the young unemployed he has pledged that public sector employment will not increase.   That’s hardly radically different from what’s happening here in the UK already.

          • http://twitter.com/gonzozzz dave stone

            You’ll be claiming Hollande is a member of the Conservative Party next…

            Hollande proposes:
            RAISING the tax rate (150,00 euro +) from the current 40% to 45%.
            Creating 60,000 NEW teaching jobs.
            LOWERING the retirement age down to 60 (from 62).
            Create 150,000 JOBS in areas of high unemployment.
            Founding a PUBLIC investment bank.
            A 15% increase in the tax on BANK PROFITS.
            REFORM of tax loopholes which have previously benefited large corporations.

            And many more policies (60 reforming policies in total) which would leave little Georgie Osborne in a befuddlement of tangled towels.

            Ain’t nothing like what’s happening here already.

            http://francoishollande.fr/assets/Uploads/Projet_presidentiel_Francois_Hollande.pdf

          • Hugh

             Reducing the retirement age to 60 alone should be enough to disqualify him.

          • girlguide

            He is raising the higher rate tax to a lower level than that which already exists in the UK.

            He’s making promises he can’t keep.

        • Chris Cook

          @AnotherOldBoy:disqus 

          Good grief.  Are you here from planet Austeria?

          Private banks’ ability to lend is neither here nor there.

          What’s missing is purchasing power in the hands of the 99% rather than the 1%.

          Most people in this country are insolvent; illiquid or both. 

          What’s needed is massive cuts of taxation on earned income, particularly for the low paid, and a switch to taxation of unearned income from privileged property rights. This won’t happen as we are governed by the party of the privileged.

          What’s needed is massive spending on affordable housing; new infrastructure; renewable energy and energy savings and above all in training and re-skilling the population to carry out this work ourselves.

          Financing and funding such expenditure is simple, and self funding out of the new tax base thereby created.

          I advocate  new  issuance of twentieth century ‘stock’.

          A Stock Answer

          This is the undated credit returnable in payment of taxes with which sovereigns funded their investment and expenditure for 500 years until public credit was privatised 300 years ago.

          • Anonymous

            Hi Chris, not sure I understand all of this- but it sounds fascinating,and really solid ideas.

            Great to see you back here getting in amongst it.

            Jo

          • Anonymous

            Dear Mr Cook, I believe I am from planet Earth. 

            Having read many times your views about “privileged property rights” and been told that governments do not spend taxpayers’ money, I know I am not from the same planet as you.

          • girlguide

            I would totally agree that there needs to be a reduction in taxation on the low paid, but I am baffled that this is not Labour party policy, and rather that it is the Coalition who are extending the personal allowance towards £10k.  

            I also agree with your paragraph about new infrastructure and re skilling, however the Labour government had an appalling record on all the points you mention.  If they had concentrated their taxation revenues on your listed items, instead of overloading the public sector with middle managers, this country would be in a far better position to weather the recession than it is.

          • http://www.facebook.com/people/Joe-OConnor/100000837891021 Joe O’Connor

            What about the resultant loss in the price/value of assets and the loss of wealth accumulated through property ownership, which in this country is massive (post Thatcher)? This approach might also lead to a flight of capital and a collapse in investment thus outweighing the economic stimulae provided by infrastructure spending. 

    • Anonymous

      This data is misleading because these days ANY job which attracts 16 (or more) hours of paid work per week is classified as a “full time job” when of course it clearly isn’t. And only 6% of the cuts proposed by the Coalition have happened to date. If things are like this now goodness only knows what life will be like in the United Kingdom post April 2013 if the other 94% of the cuts, particularly to welfare, impact in full. To be honest I’m doubtful if the Coalition’s full programme of austerity and cuts is actually realisable; they may be forced to back off or delay on some of the harshest measures.

  • http://twitter.com/gonzozzz dave stone

    You only have to make a comparison with the U.S. economy:

    U.S. growth in the final quarter of 2011: 2.8%.

    And U.S. unemployment aid applications are near a 4-year low.

    As Obama said last week: “You can’t cut your way to growth.”

    • http://www.facebook.com/people/Joe-OConnor/100000837891021 Joe O’Connor

      Of course we are dependent on the Eurozone for a market and consumer demand there has fallen off a cliff whereas the US is, as Obama has said, a Pacific country
       ( California and all that). So, while I can see that Obama’s policies have been better than those of our government I still don’t think that were these policies adopted in
      the UK growth rates here would be comparable to those of the US.

  • ian

    the tory con will be in full action after April, a lot more council jobs to go and a lot of Education has now been privatised and no long ‘public sector’ but private and watch how they will claim private has gone up

  • Kernow Castellan

    Oh dear. Yet another journalist who does not know how to read ONS data.

    From Jan release:
    Sep-Nov average unemployment: 2.68m +188k compared to Jun-Aug average
    From Feb release:
    Oct-Dec average unemployment: 2.67m +48k compared to Jul-Sep average

    So September falls out of the figures, and December comes in, and the average falls. Thus December’s figures are lower than September’s. Ergo there cannot have been 8 months of rises in a row.

    So we know that unemployment fell in December, compared to September, but one month’s figures can be volatile (that is why we use rolling 3-month averages).

    Unemployment is high, and December’s fall was not very much (it only dropped the average by 0.1m). There is more than enough ammunition for you to make your case without having to resort to innumerate misreadings of statistics.

  • Anonymous

    This is a really good idea:

    Graeme Cooke, IPPR Associate Director, said:
    “The government should guarantee everyone who has been unemployed for more than a year a job at the minimum wage in local government or the voluntary sector. But with that right should come the responsibility to take that job or risk losing their benefits.”

    This makes far more sense than the welfare reform claptrap we have heard from both governments for the last decade.

  • Anonymous

    Really excellent well researched article- thankyou for great reading here.

    Jo

  • Daniel Speight

    I still fail to understand that when we are looking at long term youth unemployment we would at the same time raise the retirement age. There must be some reason. Are we forecasting a return to full employment anytime soon?

    Could it be that government youth unemployment costs are cheaper than pensions?

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