Wednesday, 16 January 2013
A lot less people will find jobs in construction in Wales in the near future. According to the The Construction Skills Network the recession in the industry in Wales reflects the wider job losses in the sector across the UK.
In the UK as a whole the sector lost 60,000 jobs in 2012, while output fell 9%, in large part because of public spending cuts. Employment in sector is expected to continue to fall every year until 2016.
The construction industry is an important barometer to what’s happening to the economy. No growth in construction, means no growth in the economy.
But we’re constantly told that “jobs” in the economy are not going down. Employment figures don’t reflect the recession in the economy. A strange phenomena, recession without an increase unemployment.
Now an explanation. Those on government work programmes are also regarded as having a “job” although, of course they’re not paid.
Added to these are the half a million people working fewer than six hours a week. Looking at these you begin to get the narrative. Unemployment figures become misleading.
Such figures create the impression that the economy is in a better place than it is. It’s not.
The net rise in employment these last two years has gone hand in hand with growth in underemployment, more than 3 million people in jobs (almost a tenth of the workforce) at present crying out for more hours.
Dodgy figures lead to dodgy answers. Knowing you’r in the mire is a start to getting out of the mess. Unless the gravity of our economic predicament is acknowledged the country will continue to put its collective heads in the sand and policy will continue without change.
The government’s policy of austerity will continue, unchanged. Even though a realistic look at the statistics show that the policy is failing.
Change is needed. More government borrowing is required. Yes, borrowing.
Thrift is not good in a recession. It’s only a policy for the good times.
Temporary borrowing at low interest rates is a sensible way forward.
Borrowing only becomes a problem when it underestimates the risks involved, and when the borrower may not be able to afford the repayments. None of these apply, although the government would want us to think otherwise.
The financial crisis was caused in part by excessive borrowing by consumers who thought house prices could never fall, but mainly it was banks over-extending themselves.
The recession caused high government borrowing, and not the other way around.The right time to cut government borrowing is when the economy is strong, and the cost of borrowing is high. Not now.
The government are right this is the time to build Wylfa B and electrify the railways. But more, much more investment needs to happen. Schools and hospitals need to be built. The housing sector needs to be boosted.
Borrowing for investment purposes is a correct policy. Most mortgage holders have worked this out, but it seems that the Chancellor hasn’t got it.
The figures on construction jobs are a timely reminder the George Osborne has got it wrong. It’s his policies that are leading us to ruin.