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Thursday, 15th December 2011

Who's right on public v private employment?

Jonathan Jones 1:13pm

If you listened to PMQs yesterday, then you'll have heard two very different accounts of what's happening in the labour market right now. Had Ed Miliband been able to get anyone's attention, they'd have heard him say:

'over the last three months, for every job being created in the private sector, thirteen are being lost in the public sector.'
Cameron's response:
'Since the election, in the private sector there have been 581,000 extra jobs. In the public sector, he's right, we have lost 336,000 jobs.'
According to the Labour leader's figures, public sector losses are far greater than private sector growth. But according to Cameron's, the private sector is more than filling the gap. Why the difference? It comes down to the timescale you chose. Miliband's looking at the change from Q2 to Q3 this year. Cameron's looking at a longer timescale: from Q1 2010 and Q3 2011. Neither's completely right, and neither's completely wrong. The truth is it's not clear — the private sector may be able to make up the slack, it may not.
 
The government's confidence is based on what happened under Major. Following the recession of the early 1990s, the private sector more than filled the gap left by public sector cuts: for every job lost in the public sector, three were gained in the private sector. This is what the government thinks — and hopes — will happen now:

But for now, Miliband's point holds — even if he can't get anyone to listen to it. Worryingly, it seems that the private sector is, so far, struggling to fill the gap. Since the coalition took over, public sector employment has fallen by 305,000, while in the private sector it has grown by just 267,000:

In fact, public sector employment has dropped below 6 million for the first time since 2003. As the graph below shows, Gordon Brown's pronounced enlargement of the public sector in response to the recession has now been completely reversed — in employment terms at least.

CoffeeHousers may be wondering how public sector employment is falling at a time when, as we've often pointed out, central government spending is not being cut. The answer is that the cuts are largely being borne at a local level. For every job lost in central government over the past year, four have been shed in local government. This means that, for the first time since at least 1990, fewer people are employed by local government than by central government.

Filed under: David Cameron (1912 more articles) , Ed Miliband (698 more articles) , Employment (149 more articles) , John Major (12 more articles) , PMQs (254 more articles) , Private sector (41 more articles) , Public sector (118 more articles) , Spending cuts (627 more articles) , UK politics (5408 more articles)

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Comments Post comment

Rhoda Klapp

December 15th, 2011 1:44pm Report this comment

I don't suppose this can be broken down by region? SouthEast vs everyone else? No agenda, we just might learn something from a bit of detail.

Ed P

December 15th, 2011 1:51pm Report this comment

There are still too many unproductive pen-pushers. For a sustained recovery, value must be added and then exported - I don't see how the public sector is anything other than an impediment to this.

Nicholas

December 15th, 2011 1:55pm Report this comment

Didn't stop the BBC touting Milliband's version.

Facts are all well and good but the current narrative is not about facts. It's about Labour + Public Sector Unions + BBC propaganda vs Cameron not very good at getting any message across with a LibDem ball & chain dragging him down.

Captain Black

December 15th, 2011 1:59pm Report this comment

Looking at the final graph - seems there is still a lot of fat to cut. Can't understand why we're having problems cutting the deficit - what are we doing now that requires all those extra state employees, that we weren't doing in 1999. Is there a breakdown by department?

Pot Head

December 15th, 2011 1:59pm Report this comment

Lots of new jobs created in the private sector at companies like Serco & Capita to take on outsorced public sector contacts as councils shed workers. Private sector job growth is mostly just smoke and mirrors.

tom jones

December 15th, 2011 2:51pm Report this comment

Better to have REAL jobs in the private sector being created than the fake public sector jobs that Labour used to make the jobs figures look better. Growth will only come when the private sector isn't strangled.

Dennis Churchill

December 15th, 2011 2:59pm Report this comment

So the purpose of the public sector is to provide job opportunities rather than carry out specific and necessary functions?
We have truly lost the plot.
The state sector can only be as large as the public sector can support.

TrevorsDen

December 15th, 2011 3:02pm Report this comment

From the public sector graph its easy to see why growth has stalled - the public sector jobs produce nothing and it puts the current loss of public sector jobs in perspective.

michael

December 15th, 2011 3:05pm Report this comment

Cost of employment under JM...2% of salary

Cost of employment under DC...rising to 18% of salary + minimum wage + awash with foreign labour + bogged down by bureaucracy.

.....Hmmm.

Fundamentals look as-sick-as. (comparatively)

libertarian

December 15th, 2011 3:11pm Report this comment

They might also want to take into account the HUGE number of unfilled jobs and the fact that jobs in manufacturing, engineering and high technology are almost impossible to fill due to staff shortages caused by a lack of suitably qualified people

Russell

December 15th, 2011 3:13pm Report this comment

Single childless public sector or quango box ticker on £35,000 per year with unsustainable pension benefits made redundant.
Entitled to job seekers allowance £3250 per year.

Cost to taxpayer now reduced by £31,750.

Happy taxpayer.

Richard

December 15th, 2011 3:15pm Report this comment

Serious question: what's with the discrepancy between Cameron's figures "since the election" (581,000 private - 336,000 public) and the Spectator's "[s]ince the coalition took over" (305,000 private - 267,000 public)?

Peter From Maidstone

December 15th, 2011 3:21pm Report this comment

Never any comment by politicians on the effect of mass and uncontrolled immigration on the employment of British people.

DM Andy

December 15th, 2011 3:25pm Report this comment

Cameron may be getting his figures by using the timeframe Q1 2010 to Q3 2011 but that would mean that he's misled the House of Commons.

Cameron said "Since the election" and the election was in Q2 2010. But Cameron's mistake is not a surprise, it is only by taking the credit for Brown's private sector recovery in early 2010 that Cameron can make the claim that Miliband is incorrect.

Kittler

December 15th, 2011 3:43pm Report this comment

Yes Rhoda Klapp, figures were produced last month by the Office of National Statistics. The region with the highest level of private sector employment was not in the SE of England but was NE Scotland.

Pettros

December 15th, 2011 3:49pm Report this comment

"public sector jobs produce nothing"
not true.

Dennis Churchill

December 15th, 2011 3:56pm Report this comment

Peter From Maidstone
December 15th, 2011 3:21pm
No, not even when discussing youth unemployment. Obviously they believe companies would just have stopped employing people if the million or whatever the figure is for immigration in the last decade, had not joined the workforce. Just as they would not have trained young people rather than import them ready trained.
Supply and demand does not work in employment, housing, transport, energy consumption etc when immigration is involved.

Kittler

December 15th, 2011 3:56pm Report this comment

Is it the sector that employs which is important or the work done.
Is it more beneficial to the community to employ more private sector lap dancers or more public sector Border Agency staff?
Who's for which?

David Ossitt

December 15th, 2011 4:05pm Report this comment

Question, in the photograph who is Clegg looking at?

In the full video he was repeatedly leaning over and looking around the back of Cameron.

Nicholas

December 15th, 2011 4:36pm Report this comment

Pettros: ""public sector jobs produce nothing"
not true."

Quite right. They produce mountains of red tape and unnecessary bureaucracy. They produce incredible frustration and anger if you ever have to deal with/wait for their unaccountable "decision makers". They have produced a whole generation of brainwashed, brain dead, socialist leaning yoof. They produce waste on a monumental scale. And they have produced a whole elite army of useless Chief Executives who are paid more than the Prime Minister and really seem to think that you can apply market forces to a captive, over-taxed, coerced and controlled customer base who are provided unwillingly and at enormous cost with a no-alternative "service" heavily larded with socialist propaganda. I won't even start on ACPO and Common Purpose senior police officers who have produced a police "service" fit for nothing except chasing New Labour's political crimes and so far removed from its honourable inception that it is like an alien invasion.

If you are a member of a gobby minority shrieking about its rights which is offended by or wants to ban everything or a newly arrived foreign immigrant with ten wives and fifty children they are really great.

Good going. The bigger the government the smaller the citizen.

In2minds

December 15th, 2011 4:48pm Report this comment

What is Clegg looking at? Cameron's arse, 'read my lips, no referendum'!

Dennis Churchill

December 15th, 2011 4:59pm Report this comment

Kittler
December 15th, 2011 3:56pm
The idea is the Lap Dancers pay enough tax to allow the employment of the Border Agency Staff.

Bickers

December 15th, 2011 5:12pm Report this comment

Can we have a breakdown (under FOI) of how may jobs have been outsourced to the private sector in the last five years? I suspect public sector employment (and costs) are not falling as fast as the Coalition claims when outsourced jobs are taken into account.

If the Government wants the economy to grow then it and the useless EU need to get off the backs of business backs - too much Government is the problem, not the solution,

Cynic

December 15th, 2011 8:22pm Report this comment

"Neither's completely right, and neither's completely wrong." Well, what a surprise! I think it's called spin.

Cynic

December 15th, 2011 8:23pm Report this comment

"The answer is that the cuts are largely being borne at a local level. For every job lost in central government over the past year, four have been shed in local government." Time to wield the big axe in central government then.

Cynic

December 15th, 2011 8:28pm Report this comment

At the risk of "banging on" in much the same way as PfM does about immigration, how many of the public service jobs are there to deal with EU legislation?

Clear Memories

December 16th, 2011 12:37am Report this comment

This is all wonderfully academic - and pointless.

The amount earned by the private sector directly dictates the potential size of the public sector. If the private sector stagnates, we cannot afford the public sector.

And that is where we stand. We have a bloated public sector we cannot afford, contributing nothing to the public good, either as funds or quality-of-life improvements. These people have to go.

IF their jobs are critical, necessary or desirable, the private sector will sniff out the opportunity, step in to provide the service and re-employ them.

I suggest we assess all public sector jobs against a simple criteria - is the private sector, anywhere, matching this role at a profit (or even break-even). If the answer is no, scrap the role.

And if you're a public servant, ask yourself "Could I start a business doing what I do now and make a successful living for myself, my family and others?" If the answer is no, you're just another parasite leeching off the public purse and its time to look for a proper job.

Major Plonquer 1

December 16th, 2011 3:46am Report this comment

Sirs,

In the picture accompanying this article it would appear that David Cameron has a second head growing out of his arse. Which one is doing the talking?

richardofkent

December 16th, 2011 6:44am Report this comment

Msg to David Ossitt - Clegg is not looking at anything, he is in fact trying to hear Cameron speak. There are loudspeakers set in to the headrests of the seats.

David Ossitt

December 16th, 2011 2:36pm Report this comment

richardofkent

“Msg to David Ossitt - Clegg is not looking at anything, he is in fact trying to hear Cameron speak. There are loudspeakers set in to the headrests of the seats.”

Well spotted, it is so obvious now that you have come up with the answer.

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