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Unemployment: bleak, bleak, bleak | Editorial

Youth unemployment is now nearly at the million mark and British workers are in for a terrible time

For most of the past year, coalition ministers have defended their economic policy in two ways. First, however bad the UK’s economic condition, it was still better than the likes of Greece – rather like claiming to be the liveliest patient on the intensive care ward. Second, while the economy was tanking, the jobs market was holding up. Well, no longer.

Yesterday’s unemployment figures confirmed that the jobs market is weakening, and fast. Eighty thousand people joined the dole queue in the three months to July – the biggest jump in two years, and one which takes the number of people out of work back above 2.5 million. David Cameron told MPs yesterday that the figures were “disappointing”. In which case, he should prepare for many more disappointments in the coming months; employment is what economists call a lagging indicator, and it can take a painfully long time to turn around. Between historic spending cuts and public-sector job losses in Britain, the US in the doldrums and the eurozone mired in an existential economic crisis, it is hard to see where any significant chinks of new demand might be found. George Osborne began his first ever budget speech by referring to the state “crowding out private endeavour”. That always sounded a dubious claim – and yesterday’s report showed that 111,000 jobs were lost in the public sector in just the three months to June; the private sector took on a mere 41,000.

Numbers like these go a long way towards explaining current politics. Ken Clarke may well refer to the rioters of this summer as “feral”, and Mr Cameron may describe them as exponents of “criminality pure and simple”, but both men would do better to look at the line of the official report that notes youth unemployment is now nearly at the million mark.

Or take the “national day of action” declared yesterday by the trade unions for the day after Mr Osborne’s autumn statement. It would be easy for the Labour leadership to follow recent tradition and treat the party’s historic links with the unions as a liability, or to adopt the other lazy fallback of dismissing the brothers as defenders of their own sectional interests. This time round, trade unionists might very well win greater public support. With ever more workers on the dole and the remainder enduring the quotidian pain of seeing their wage rises outpaced by inflation, the trade unions are in a good position to voice wider public discontent with both the state of the economy and the government’s policies. True, this winter’s industrial action may be based around the particular issue of public-sector pensions – which will lead to the usual suspects indulging in the usual lazy talk about gold-plated retirement funds for civil servants. But there is ample opportunity here for the labour movement to focus its wider campaigns on issues of concern to the public as a whole – and the union bosses are showing signs that they may well take it.

Since this coalition was formed, the biggest bet in economics has been on whether a second recession – a double dip – is on the way. But the labour market is already in a double dip: the employment rate dropped in 2009, picked up in 2010 (thanks to Alistair Darling’s spending) and is again on the slide. Ed Miliband has been slow to cotton on to this nascent crisis; he need not be behind in proposing solutions. One lies in the speech made this week by the Bank of England’s Adam Posen. In it, Mr Posen, a member of the monetary policy committee, argues for the Bank to pump more money into the economy – but this time to put it into a new, wholly accountable institution that will lend to small businesses. This is an excellent idea, and one that MPs should run with. Indeed, it would be quite easy to imagine such a body lending to strategic industries and hard-hit regions. British workers are in for a terrible time; it is up to Westminster to think of ways of alleviating the misery. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds