Home > Uncategorized > A UK labour market sign of the times fact

A UK labour market sign of the times fact

When you don’t care about productivity (down about 5%) the UK labour market is doing well. The average number of hours per job is finally increasing again, the number of jobs rises (largest increase: health and social work), the activity rate is going up and ‘narrow’ U-3 unemployment is 0,2% lower than four years ago.’Broad’ unemployment however increased with about 1% in this period. At the same time data on employment clearly show the character of the New Austerian State.

Public sector employment as a percentage of total employment, seasonally adjusted, UK
UK unemployment

Source of the graph: ONS.

Austerity pope puppet Olli Rehn already stated that government deficits are no problem – as long as the money is used to prop up the balance sheets of banks:

As regards the treatment of capital injections under EU fiscal rules, these are normally considered as “relevant factors for financial stability” and/or as one-off measures, and thus not included in the structural balance and not counting against the Member State in the context of the Excessive Deficit Procedure.

And indeed: in the UK the government increasingly acts as an employer of last resort for the banking sector while at the same time shedding part of its educational responsibilities (and employees).

Also, average wages for government employees (excluding reclassifications) declined with about 1% while consumer price inflation was about 2,7%.

  1. Ken Zimmerman
    October 19, 2013 at 10:48 pm

    Explain something to me please. Since there is no single blueprint as how to collective living should be organized, why is it wrong to put banks and other financial actors up front and have our collective living arrangements reflect that placement. In terms of the story here, why is it okay for the UK government to invest heavily in education and paying fair wages to government workers, but not okay for that government to invest that same money in ensure full employment for private financial workers and to ensure the banks and other financial organizations that employ them are doing well, economically speaking? I’m an anthropologist and historian, not an economist. But I do find what economists say and do interesting.

  2. October 20, 2013 at 1:16 am

    This is a “real-world” economics blog. Economists (both academic and professional) should make more comments on economic issues, particularly about what they see as important in the real-world. There is a dearth of critical comments on the economic thoughts and assumptions behind current discussions.

    Whilst economic philosophy and history have their place, they are one step removed from actual economic policies and actions which have immediate real-world impact. A disproportionate amount of philsophical comments, often unrelated to economics, takes us far away from the urgent economic issues of our day.

    This post is an example of economic relevance. In the short-term, productivity is a misleading economic measure, often mis-interpreted. Because economic production changes relatively slowly compared to employment changes; when employment falls productivity rises and vice versa, in the short run.

    It is what happens to economic growth and employment in the long run that matters. You can create employment temporarily by doing all sorts of stupid things (e.g. bloating the government bureaucracy or the finance sector), but in the long run productivity will decline, because economic growth will be muted. Contrary to Keynes, in the long-run we may be dead but our kids will be alive and will suffer the consequences of bad policies.

    Developed economies have reached the stage where long-run policy errors have created permanent structural problems which prevent even short-run policies from being effective. One piece of evidence (among many) is the plunging “productivity of money”, aka the velocity of money in the US.

  3. Robert Locke
    October 20, 2013 at 6:20 am

    The question is not that economists don’t comment on this blog but why they don’t. I get the impression that they don’t because they don’t feel they have a common language with the noneconomists. Who is responsible for that? The economists of the neoclassical and econometric school, who could only justify the new Denkart (way of thinking) on the grounds of it being an improvement. People were confident that it was in 1960, but that confidence has declined rapidly in recent years because of reality checks . So we’ve got a real Mulligan stew in the real-world.

  4. BFWR
    October 20, 2013 at 9:40 am

    The problem with economics is it does not have enough philosophy guiding it, or rather it adheres to faulty and entirely unethical philosophy like that the system is more important than the individual. It can’t even get the most basic things straight like for instance its obsessions with employment and profit, as if these were the main purpose of economics/the productive system. And don’t get me wrong these are perfectly legitimate economic purposes, but with just a little thought one can realize that the primary and most basic purpose of production is…..consumption. This failure to assess basic purpose is why despite an incredible capability to produce…we can’t seem to stably provide sufficient purchasing power to liquidate prices and so the economy routinely stumbles. Now if we philosophically understood that consumption actually was the primary purpose of production we’d have no qualms about implementing policies like a universal dividend to the individual in order to facilitate that most basic purpose, especially if both the purposes of employment and profit fit nicely within…and beneath the actual primary one. Philosophy, its WAAAAAAY more important than merely economics. And of course the purpose of philosophy, which is Wisdom, is so superior and so far above the oxymoron of current economic “wisdom” that the latter recedes almost to a speck. And why? Because just as the example I gave above illustrates, Wisdom, actual Wisdom that is, is better able to decipher truth and confront basic purposes because it cuts through orthodoxies and habitual thinking which so often blind otherwise intelligent people to the obvious. We’d be well served economically if we took the most basic condensations of human wisdom and made sure that policy reflected and aligned with them.

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