Thursday, 13 October 2011
The dole beckons
The largest manufacturing plant in Britain is opening today in Wales. It will manufacture aircraft wings from carbon fibre. Good news for the economy of North East Wales and welcomed indeed.
Set against the latest unemployment statistics, it is but a drop in the ocean. The latest unemployment rate is 8.1 per cent with 2.57 million of our adult population out of work. It was seventeen years ago, when John Major was Prime Minister, that levels were as high
But, perhaps, most worrying, yesterday’s figures show youth unemployment nearly at a million.That’s roughly one in five youngsters without work. What the statistics show is that unemployment amongst young people between the ages of 18 and 24 is increasing twice as fast as for the workforce as a whole and there has been a dramatic increase in long-term youth unemployment. Not a healthy state of affairs for such a large number of the nations young to be without a purpose in life.
These figures are an indication that the economy is slowing down and most economists are predicting that the labour market sadly, will get much worse before it gets better.The government is being very successful in its aim of
cuts to the public sector thus causing jobs to be shed. But what it has singularly failed to do is get the private sector to take up the slack. Whilst public jobs are being lost there is no compensating growth in the private sector.
Without some stimulus of demand it is fantasy economics to think that the private sector will grow jobs that are hemorrhaging from the public sector. Government needs to do more that cross its fingers and hope that things will happen, it needs to make it happen.
Undoubtedly the move to more quantitative easing by the Bank of England and George Osborne’s ‘credit easing’ will help but money needs to move from the balance sheets of banks into the real economy and soon, or the country will be looking at even more dramatic rises in unemployment.
The irony is that unless government takes some fiscal measures to inject demand into the economy, public finances will shift off track and Chancellor Osborne is less likely to meet his borrowing forecast of £122bn for this year.
Until there is devo max and Wales has control of all the economic levers there is a limit to what the Welsh government can do.
But it could do more. It can be a little more creative in boosting Wales’s labour market. It could support jobs through ‘short time working.’ More could be done to keep skill levels up amongst the unemployed so that their abilities don’t deteriorate whilst out of work thus making it even more difficult for them to get jobs.
But Carwyn Jones needs to push hard for borrowing powers for his government. It is at times like this that governments need to invest in large capital infrastructure schemes. Investment that could boost the Welsh economy and make it better placed to take advantage of an upturn when the economy eventually takes a turn for the better.
With the economy growing at half the pace it needs to in order to keep unemployment stable. That isn't going to change any time soon – in fact it is probably going to get worse.
It Westminster is not inclined to do anything then the Welsh government should.
That something should be to demand full control of the Welsh economy. Yes, devo max. This is not a time for timidity but a time for assertive leadership. That would be properly ‘’standing up for Wales.”