The unemployment pain is only just beginning

se1man

Let's make a finite amount of money available for claimants.

More claimants = less cash per claimant.

So the incentive to find work (or take work) rises as things get worse...

Hysteria

Well - I guess Nassim Taleb would advise against this approach but I'll go ahead anyway - it's the RATE of rise that is particularly shocking isn't it?

So eventually (surely?) we are going to have to put money into making employment cheaper - reduce tax on business (the wealth creators) - throw away restrictive regulations, carbon tax and the like......Olympics? ID Cards? Trident?

Trevors Den

"The only upside is that the monthly rise in unemployment may be soon reaching its peak."

Well lets hope so. Last months increase was the biggest on record. Can you imagine what would happen if we had another couple of months like that?

I see Lord Rio was whining that the tories were wallowing in the bad news. How pathetic. The nation is surrounded in shit and the people to blame are the ones who are pointing out that we have stepped in it.

jim

I think 40% unemployment is quite likely. Banking could contract by 50%, given how bloated it got.Then large scale government cuts begin by the end of the year, as government income plunges.
That's why it's called a depression, it's depressing.

luke

"Every month, Cameron will say “your ‘help’ isn’t working, and every month he’ll be right"

What an odd comment Fraser. Are you sure about this? What "help" is supposed to prevent unemployment going up in a recession? What would Cameron do that the government isnt?

These are the serious questions that the tories have to answer if they want to show they are ready for government.

David Cameron may think its enough to score political points and then call Brown a phoney, but I can guarantee you now that more will be needed.

William Blake's Ghost

Fraser,

Where is the spike in unemployment post June 2010? You need to include all those Labour MP's and their apparatchiks.....

Screwtape - aka TGF UKIP

Sorry, Fraser, nowt to do with this but just to ask what has happened to Nicholas.

No other posts had the same intellectual weight or were so well expressed as those from Nicholas and he has been missing for a good few weeks now.

Any other Coffee Housers know if he has de-camped to another blog site, if so I'd dearly like to know which one. On the other hand, if you are unwell but reading this, Nicholas, then I'm sure that many other Coffee Housers as well as myself would like to wish you a speedy return to good health and an early return to the Coffee House.

Verity

Screwtape, aka TGI UKIP - Seconded.

hysteria

what luke said -

D Short

se1man, how much do you think it would cost to implement such a silly scheme?

And what's the use of an incentive to find work if there is less and less to be found - didn't you read the piece?

And let's not forget, as just about everybody who criticises the unemployed, that people have paid in while at work. That's part of the point of your National Insurance Contributions.

The only fair and logical change that could be made is not to pay any benefits to anyone who has made no contribution. But no political party would dare do that, and make millions literally destitute.

No change in the law will get rid of a problem that has built up over decades.

Matt, US

True, unemployment is a lagging indicator, but why are you so sure it will continue to rise for at least 36 months? This especially given that I've heard estimates of about another year until recovery (granted, in America, where Obama might not yet foul things up as bad as Brown has).

Likewise, the British population is at least 10% higher than in 1970, meaning that a per-capita or percentage chart would be more accurate.

I'm not saying things aren't bad, but it does no one any good to report them inaccurately.

se1man

D Short: you're right - it is a silly idea, but I wasn't being entirely serious, and it's in good company... it's not the first silly idea to appear in the Coffee House.

But there was a serious point to be made: if unemployment rises from 1.5m to 3m then must we accept that the cost of that unemployment also doubles (or probably more than doubles, given the efficiency with which these things operate)?

Or should we aim to bring down the per capita cost of unemployment? So if the ranks of the jobless double in size then we should aim for a cost multiple below 2 - perhaps 1.5 or 1.75. This might be partly achieved by efficiency gains but also by making a modest reduction in the amount being paid out to each claimant.

In these tough times many of us are getting used to the idea that we're going to have to get by on a little less each month (public sector workers excepted of course). So why shouldn't we send the same message to claimants: things are getting a bit worse so you get a bit less.

And when things do get better perhaps we hold benefit down at the lower level, now that people have got used to the idea!

It's all about affordability. Silly idea, I know.

Rhoda Klapp

I'm accepting predictions from those whose graph published a year ago matches the last twelve months. Nobody? Well, we know how to treat these guesses then. This recession is not like the last or the one before, and the unemployment rate is not going to be either.

There is still time for radical measures to be taken to get things going, but nothing I've heard is radical enough. The politicians really ought to be able to think the unthinkable, but what we are seeing is the mixture as before, which didn't work last time.

dontlike the whinging rich

Tory boy con tricks again.

Show us a chart of the numbers of unemployed 1988-1997 and 1997-2009( go to 2010 projected, if you like) compared

The figures you give are for changes in numbers, not the numbers themselves.

Hysteria

D Short

"That's part of the point of your National Insurance Contributions."

er - no - NI is a Ponzi scheme - contributions are simply a tax that goes to the general ledger account - it does not go to a fund to pay out future claimants.

Fraser Nelson

dontlike the whinging rich, you may notice a second graph. It's below the first graph. That gives the cumulative total.

Chris Gilmour

The number of job vacancies in the UK is falling by about 10% per month, and already the TUC is claiming that there are on average ten applicants per job vacancy nationally.

Its not a case of more people becoming workshy, its a case of more people being made redundant than new jobs created.

Could the government not cut employers National Insurance contribution to make it cheaper to employ people. This could be funded in much the same way that bank bailouts are funded, just borrow money or print more.

Alf Tupper

On the level of anecdote. This situation is big and scary.

I'm in my 36th year of working, been hit by two 'recessions' and climbed out OK. But they were not in the same league as what is happening now.

Luckily I'm on the books with a big company working to Council budgets which have as yet been relatively unaffected. But the agency staff we had alongside us, have been culled almost entirely.

Those left were given the choice of taking a £45/week cut, or finish. They all went for the cut.

These are people - skilled tradesmen - who were on just below £10/hour before the cut. From this they were, and will still be, deducted £20/week for 'admin' costs.

This, against the wicked mortgage repayments they most of them are saddled with, mean that the numbers have jammed.

I hear their stories and feel sad. Of course I don't even hear what those who were finished are going through.

I am ashamed that my generation have passed them this.

We are absolutely shafted.