Unemployment is good for the economy. By Jabed Tarapdar
What costs the government more; paying a graduate £458 a week to work in the public sector or £53.45 a week to be on Job Seekers Allowance?
On Wednesday, 17 January, Unite General Secretary, Len McCluskey said ‘‘Once again, young people, aged 18-to-24, are bearing the brunt of George Osborne’s cruel and blinkered economic and fiscal policies that have drained demand from the economy. The next generation is being sacrificed on the altar of economic Thatcherite orthodoxy.’
I stand before you not agreeing with this method, but only to shed light on the harshness of this reality. According to Len McCluskey the ‘government is borrowing money for people to do nothing’ which has caused the ‘surge in joblessness in the first place’. ‘This is money that could have gone towards creating jobs, boosting demand and plans for infrastructure projects’.
So why has it not? Why has there instead been a ‘lassez-faire’ approach of ‘localism’ from the government? During the Prime Minister Questions Ed Miliband put it to David Cameron that ‘long term youth unemployment doubled in the last year by 102%’ because the cuts in the public sector have been ‘too far too fast’. The logic behind the public sector cuts is that the private sector will be the ones to employ graduates.
Speaking at the Local Government Summit 2012, Eric Pickles explained that partnerships between local authorities and the private sector will stimulate growth. ‘We are creating the conditions for strong local leadership. Councils and entrepreneurs will work together to be in the driving seat as never before’. It will be the duty of local governments to work with the private sector and use their own ideas and initiative to develop their local economy with support from the government.
That sounds fair until you question what private sector? The beleaguered private sector is itself struggling to survive the onslaught of the economies current unforgiving wrath, let alone take the brunt of responsibility to employ the millions of unemployed graduates, which is set to ‘rise further in 2012’, according to Chartered Institute of Personnel and Development. They warn that the private sector will ‘fail to offset the 120,000 job losses in the public sector in 2012’.