Friday, 20 June 2008

How many loafers are loafing about?

The Bank of England would like to replace wage restraint for interest rate increases. This "policy" would inevitably fall hardest on public sector workers. Darling has already indicated his intention to push for below-inflation wage increases for public sector workers. Next year's wage negotiations could prove to be very contentious.

Yesterday, I had a quick look at public versus private average earnings. The data showed that between 2001-4, public sector wages grew faster than those in the private sector. More recently, the private sector had the edge. Perhaps, the key finding concerns recent real wage developments. Neither wage growth in either sector; private or public, have been able to keep up with inflation. Average real wages are declining across the economy.

Today, I looked at public sector employment. The public payroll peaked in 2005 at almost 5.5 million. Labour pushed through large increases in public employment, between 1998 and 2005, hiring an additional 670,000 workers.

More recently, the public employment numbers have fallen slightly. The government deficit has risen, pushing up public sector debt and threatening the government fiscal targets. It also means that the government now has little room to expand expenditure in an effort to boost growth and maintain aggregate demand.

Too much spending during the good years, and now there is little room to use fiscal policy as the bad years approach. Timing is everything.

4 comments:

Anonymous said...

This and incapacity is how we pretend to have low unemployment.

There is an awful lot of non productive labour in the UK.

Almost soviet in its denial.

vodka drinker said...

People in the soviet were never in denial about how bad things were. They always knew thigs were f00ked.

Anonymous said...

http://www.dwp.gov.uk/asd/asd1/stats_summary/Stats_Summary_may_2008.pdf

Here's the DWP's take. Key headlines:
- The number of people claiming incapacity benefits of working age is 2.64 million in the year to November 2007.
- there were 11.98 million claimants of State Pension, of these, 37% were male and 63% female.
- there were 2.93 million recipients of Disability Living Allowance, 472 thousand recipients of Carer's Allowance, and 1.54 million recipients of Attendance Allowance.

Note how incapacity benefits far far outnumber job seekers (page 3)
Note how job seekers has gone down alot since 1999 but has been exactly matched by increases in the rest to give a stable total of 5 million benefit claimants. I dread to think how many are outright scroungers.

It's difficult to present a more compelling case of the impending bankruptcy of the UK than these stats. We've got the connivance of reducing unemployment figures by dumping everyone on disability, we've got women retiring earlier then living longer than men (about 10 extra years of benefits, though of course feminists aren't clamouring for women to pay more NI than men), and probably well over 10% of working age adults not in any work. Add in the army of public sector loafers and the private sector is carrying a pretty heavy burden here.

Nick

Mark Wadsworth said...

What the people above say.

Further, there are two measures of public sector employment - the official figures and the ILO definition which includes GPs, university lecturers, quangista and para-statals like railways, BBC and so on.

This chart shows both narrow and broader measures.

I did a post on this - taxpayer funded jobs are up by about 1.8 million, not whatever silly figure the gummint peddles.