No, I don’t mean by this post title that rather trendy rapper Ben Drew, from Forest Gate, London – rather I’m referring to several calls to the Government to re-think their approach to tackling the travails of the UK economy.
According to Barclays Wealth chief economist Mike Dicks, the UK faces a similar problem to the US with unemployment rising but a lack of growth in private sector employment insufficient to off-set job loss from the public sector. In an institute of Fiscal Studies (IFS) report recently published Mr Dicks wrote,
‘A sharp labour market correction, with firms shedding workers US-style at the same time that the public sector workforce is trimmed cannot be ruled out’.
The Office for Budget Responsibility forecasts unemployment will rise in the UK to over 8% during 2011 – this compares to the US unemployment rate running currently at 9.4% of the working population. Mr Dicks describes this situation as a “jobless recovery” – commenting on the recent recession being atypical in that unemployment during the economic contraction did not increase but now that the economy is growing (albeit modestly) unemployment is on the increase.
I covered some of these issues last year in my Beveridge Curve blog post – warning that the US was suffering a position where workers do not have corresponding skills to match the requirements of new jobs, combined with a lack of jobs growth all of which resulted in an obdurate long-term unemployment problem.
Plan B, according to the CIPD, and the outgoing director-general of the CBI, should be to stimulate growth through new jobs creation and to ensure the UK labour force has the necessary skills to undertake new job roles.
One way of doing this would be to stimulate local investment cycles, especially in those regions of the country typified currently by disproportionately high levels of public sector employment, such as the North East.