Ross Clark Ross Clark

What comes after furlough?

What an enriching business it is, having a global pandemic. That is the conclusion, at any rate, one might reach from reading, in isolation, the government’s figures on employment and earnings. According to the Office of National Statistics (ONS) the average earnings for employees have risen by 4.7 per cent over the past 12 months – finally lifting the nation from a lost decade of near-static wages. Never mind that the economy tanked by nearly 10 per cent last year, nor that whole sections of the economy are in the deep freeze, we’re in the middle of a pay bonanza the likes of which haven’t been seen in Britain for a decade and a half.

No, it doesn’t make much sense to me, either. It is yet one more bizarre economic statistic to have come out of this crisis. Among the others is the huge drop in corporate bankruptcies, which were at their lowest level last year since 1989. Then there is the official unemployment rate. While it has risen by 1.3 per cent over the past 12 months, does anyone really think that an unemployment rate of 5.1 per cent accurately reflects the economic turmoil of the past year?

The reality is that we have never had so many people standing idle in recorded economic history. While the official unemployment rate has risen by a quarter, the ‘claimant count’ – the number of people claiming unemployment benefits – has more than doubled over the past year to 2.6 million. Add to them the 1.85 million males and 1.88 females who were furloughed on 31 December you get a more realistic figure for unemployment of around 6.3 million, twice as many as during the deep 1980s recession. And that was before the most recent lockdown began.

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