Wednesday, February 17, 2010

Economic Inactivity

From the Telegraph:

The number of people who are neither in work nor seeking employment reached 8.08 million in the last three months of last year, the highest on record.

In all, 21.3 per cent of working-age adults are now "economically inactive", a category that includes students, the long-term sick, unpaid carers and those who retire early.
The talking points are:
  • 5.75 million people are inactive and do not want a job, a rise of 57.9% from 2008.
  • 1.64 million are claiming some form of employment-related benefits, the highest since 1997
  • Full employment is at 21.22 million, down 37,000.  Part-timers are up 25,000 and now number 7.67 million.
  • The ONS says there are 1.04 million employees and self-employed people working part-time because they could not find a full-time job.
  • The over 65 age group has seen an increase in employment up 5.1% over the last year. In contrast the number of people aged 18-24 working fell 5.2%.
  • Public sector jobs rose over the last year by 5% to 6.09million...
  • During the same period the Private Sector lost 735,000 positions down to 22.82 million.

All of this basically means that at present one in five people of working age are not in are not employed, and quite a few that are working are working part-time because there are not enough full-time positions.  I am not sure how they qualified the "do not want a job" position, but I am still staggered at that number.  I learned this week that a former colleague who was laid off in October 2008 is still unemployed despite actively seeking work.

To me these numbers paint a grim picture of where we are as a country both economically and socially.  The shrinking private sector is being increasingly expected to support massive unemployment and public sector costs.  I maintain my belief that we need to shrink the Public Sector and stimulate the markets, ideally by increasing the money supply to stimulate the paying down of debt and an increase in consumer spending through my old and long forgotten friend, the tax cut.

As for the "economically inactive number" I applaud those who are included in that number who are studying so as to pursue a more enjoyable or more profitable career path and I also salute those who are so desperate for work they are working part-time to keep things going.  I think it fair that people with genuine disabilities should be supported if they are unable to work.  At some point someone is going to have to address that high "do not want a job" number, because we need some radical proposals that will get people out to work.  Welfare should never pay more than work and those that seek a life on the scrounge from the taxpayer should be identified and have their entitlements stopped.  These numbers are unacceptable high, I hope voters who agree will let the political parties know that is how we feel.

Managing a drastic rolling back of the State whilst trying to grow the economy will be rough but the consequences of inaction promise to be worse.

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