Cuts mean unemployment is here to stay, says TUC

By agency reporter
September 11, 2010

A new Trades Union Congress analysis suggests that it may take 14 years for the private sector to create enough jobs to return employment levels to those before the recession struck, especially given the coalition government's planned cuts.

If the private sector continues to create jobs at the same rate that it has over the last ten years it will take more than two decades in some regions to make up for the jobs lost in the recession and those to come from public spending cuts, says the TUC.

The TUC analysis shows that more than a million and a quarter (1,351,000) private sector jobs have been lost since the official figures for workforce jobs peaked at over 31 million in the second quarter of 2008. With a 10 per cut in public sector employment to come according to the Office for Budget Responsibility (OBR), around 2.2 million private sector jobs will need to be created to get the labour market back to pre-recession levels, says the TUC.

The analysis calculates that as private sector employment growth has averaged 0.7 per cent a year over the last decade, it could take up to 14 years to generate 2.2 million private sector jobs and far longer in some regions of the UK.

At this rate, it could take Yorkshire and the Humber and the North West up to 24 years to return to pre-recession job levels. The West Midlands has seen no private sector employment growth over the last decade and it is therefore impossible to predict when, if ever, unemployment will fall significantly in the region.

The analysis compares job losses between industrial sectors and finds that mining and quarrying has had the biggest proportion fall in employment - losing 15 per cent of its workforce since the second quarter of 2008 - followed by manufacturing (-12 per cent) and construction (-11 per cent).

Retail jobs - the biggest sector with 4,660,000 jobs in the first quarter of 2010 - have fallen by seven per cent since peaking at 5,040,000 at the start of 2008. The East and South East of England have experienced the sharpest fall in retail jobs - both down by 9.5 per cent - causing job losses in two of the most resilient regional labour markets since the recession started.

The sharp fall in the number of jobs would be even greater were it not for increases in the number of health, social care and education jobs.

The TUC warns that with deep spending cuts to be announced this Autumn set to cause heavy job losses, the number of workforce jobs could fall below 30 million for the first time since the start of 2003. This would mean it will take more than a decade to return to the number of jobs seen in 2008.

At its annual Congress starting on Monday 13 September in Manchester, the TUC will launch a campaign to make the Government think again about its economic policies. The TUC will call on unions, users of public services and all those worried about the future of our economy to join a campaign for a fairer economic strategy that has its growth and jobs as its top priorities.

The TUC General Secretary, Brendan Barber, commented: "We can all be grateful that unemployment did not rise as high as many feared during the recession, but that does not mean we should forget that more than a million people lost their jobs."

He continued: "We may now be out of recession but this has yet to work through to any significant job creation."

'When the spending cuts start to bite and public sector job losses begin in earnest, the Government tells us that the private sector can make up the difference. But there are already many people who have lost private sector jobs chasing every vacancy," said Barber.

"Spending cuts will cause further private sector job losses, not just because the state will buy fewer goods and services, but those who lose their jobs will stop spending too. Even if the private sector does better than in the past, the spending cuts will condemn us to high unemployment for the foreseeable future," he added.

The full statistics are available here (*.PDF Adobe Acrobat document):

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