Wednesday, June 30, 2010

Number crunching

Treasury figures show that the spending cuts will cost 1.3m jobs, 600,000 of them in the public sector. HM Treasury estimates that this will be made up for with the creation of 2.5m new jobs. David Cameron now claims that 2 million new private sector jobs will be created in the next parliament, citing the 'independent' Office of Budgetary Responsibility. The private sector thinks not. The TUC seriously doubts it. And the think-tanks don't believe it. For good reason, as well. Anthony Painter points out that in the last decade the years of growth lasting from 1999 to 2007 saw the creation of only 1.52m private sector jobs, or 190,000 jobs a year. The Treasury is relying on the creation of 500,000 new jobs every year for the next five years, in a period of economic stagnation. There is no way in hell that is happening. Not only that, but most of the job growth in the last decade accomodated growth in the labour force. Now, the total labour force will grow by o.25% each year from 2011. That means the economy would have to add a net ≈100k jobs per year, just to avoid unemployment increasing. That it could feasibly manage. But half a million new jobs every year is an ornate fib with brass balls on.