David Cameron said in Prime Minister’s Questions today that there have been 800,000 more private sector jobs under his government. This is almost true, and — I thought — worthy of elaboration.
Government cannot, of course, ‘create’ jobs — all it can do is move jobs from the private to the public sector. Every penny of public sector salary is taken from the real economy, and is a penny that someone isn’t being paid (or isn’t being spent). Now, if you’re the BBC it doesn’t seem that way. It seems like the sky is falling in, because your own state-mandated budgets are being cut. That’s why the BBC had almost no mention of cuts when a million jobs were lost from the private sector, and speaks as if we are now living through a slasher era when the number of jobs in the economy is actually rising.
The number of private sector jobs crashed in 2008, and has since made an almost complete recovery:
And since the election, the number of private sector jobs has offset the loss in public sector jobs. So yes, the government is spending less on salaries but more people are working. This is as you’d expect. Cameron’s 800,000 figure compares the most recent figures (for Q1 2012) to those for Q1 2010. But Cameron was elected in Q2 2010, so he ought to start counting from then. The graph looks like this:
This would give him a figure of 529,000 private sector jobs created, less than the 800,000 that he claimed in the Commons but still offsetting the 393,000 public sector jobs lost for an overall rise of 136,000 jobs. This figure ought to be far higher, of course, and would be if George Osborne hadn’t increased taxes or had come up with a more ambitious pro-growth package. But even under the Osborne fiscal strategy — or, should I say, the ‘Darling Plus’ fiscal strategy — there are more jobs overall. This is a point the Prime Minister should make more often.
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