Thursday, 21 January 2010

Unemployed is not the same as Out of Work

It is a truth universally acknowledged that when output falls,  for employment to fall less than output and, a fortiori, for employment to rise, productivity must fall.

We are told that unemployment is falling.  This can only be the case if : productivity is falling or workers are leaving the labour force.  Workers do this because they are ineligible foe unemployment benefits.  It is called the discouraged worker syndrome, the middle-aged inappropriately-skilled, the youth barred from entry to the labour market, the degeneration of working conditions and terms of service.

The numbers of people claiming benefits may have been reduced by various means: obstruction of claims by arbitrary status requirements, complexity of applications; false training schemes; debt-attracting tertiary sector study; wageless placements and 'internships'.  But the bitter truth is that the economy is contracting viciously and taking life chances down with it.

And all this in spite of sterling devaluation of a third, and massive tax-payer support for ailing companies and failing financial institutions.

Imagine if for thirteen years there had been concentration on building infrastructure, encouraging entrepreneurship, directing government and EU funding into research and development in universities and in science park exploitation and production of results, in lowering taxes and favouring the creation of an initiative-friendly business environment, in promoting traditional industries with emphasis on the continuing appeal of their product while updating their production processes and marketing.  On favouring industry and manufacture through tax regimes, regulation, and intervention to protect from destructive and unregulated international profit-seeking.

There are people who can turn this round, but Brown is not one of them.


Anonymous said...

I'd say traditional industries would be better off without university research, which has more to do with advancing academic careers and producing PhD degrees than producing better stuff; industries are quite capable of doing their own unsubsidised research. Seymour Melman does a good job of explaining why engineering in particular has shrivelled away in the UK and the USA; much of the industry became dependent on government defence procurement and lost the ability to compete.

Elby the Beserk said...

One in five adults of working age is out of work.

The real unemployment rate is therefore 20%.

Don't tell Gordon

hatfield girl said...

I have to disagree Anon. The science parks round the universities are right little money makers. The UK doesn't have any industries big enough to fund independent resaarch sections these days. Where are the Marconi's the deHavillands of yesteryear?

I fear you may be right about the warping of university research by defence procurement funding though.

hatfield girl said...

Don't tell Gordon, Elby. I'm not sure I could be trusted to say anything courteous to the man.