Your youth unemployment editorial (18 September) sees the crisis clearly, but reaches for the wrong tools. Placements, apprenticeships and work coaches cannot conjure jobs that do not exist. We need macro solutions to macro problems. Youth unemployment is not a crisis of skills or geography. It is insufficient government deficit spending. There is not enough money circulating to employ everyone who wants to work and that is a policy choice, not an accident.
O..kay….
Macroeconomists divide the economy into three sectors: government, households and businesses, and the rest of the world.
That’s four sectors, isn’t it? I mean, I’m not too good at maths but…
One sector’s spending is another sector’s income. Put simply, government spending is income for the non-government sectors.
With the UK running a persistent current account deficit, money flows continuously abroad.
I hesitate to encroach on Tim’s territory, but this doesn’t sound right even to me…
Indeed, unemployment has long been used deliberately as an inflation management tool. As the US economist Stephanie Kelton notes, orthodox economic policy assumes that a certain amount of unemployment is necessary.
So what should Labour do? Not pay employers £3,000 to hire someone that the market won’t touch (an admission that demand is absent), but become the employer directly. A job guarantee, publicly funded and locally administered, would offer anyone a job at a living wage doing socially useful work.
Who decides what constitutes ‘socially useful’ work?
It is not welfare. It is work.
Simon Ripton Co-founder, Resilient Economy CIC
But not all their readers are insane:
It doesn’t take a graduate qualification in economics to see that Rachel Reeves’s increase in employers’ national insurance contributions has reduced their ability to take on new people. She has also created a timebomb – as, by reducing the number of new people getting jobs, she has also reduced the number of people able to start paying into pensions.
Susan West Quorn, Leicestershire
What pensions? They won’t be worth claiming if Bodybags isn’t kicked out of No 10!
2 comments:
Lemme guess. Richard Murphy?
"A job guarantee, publicly funded and locally administered, would offer anyone a job at a living wage doing socially useful work."
The thing is, nobody on welfare wants a job. They want free money for doing nothing. By all means offer the welfare classes jobs doing 'socially useful work'. It would probably cost less than what we pay now, given all the fraudulent claims. The real issue is what you do when they a) refuse to take it up, or b) turn up and do nothing, or worse are actively disruptive/criminal. If you refuse your socially useful job do you get nothing? Can you be sacked from it for non appearance, refusing to work or being disruptive, and thus have nothing? If not then its utterly pointless. Any welfare reform only has any use if the alternative is starvation. There has to be a stick, or why bother?
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