The Chartered Institute of Personnel and Development says Britain is facing “at least half a decade of serious jobs deficit."
Official UK employment figures released this week show unemployment is in fact down, but long term unemployment is up; people appear to be taking part-time and temporary positions while other prospects remain slim. For the three months to May – the figures released today – unemployment was at 2.47m people and 7.8%, slightly down on the 7.9% recorded the previous month.
CIPD says the UK economy must grow by at least 2.5% every year until 2015 if the private sector is going to be able to create enough jobs to compensate for those that are to be cut from the public sector. Growth even slightly less than this, between 2%-2.5% per year, would seriously diminish overall jobs prospects, the organisation says.
While the Office of Budget Responsibility (OBR) says unemployment will peak at 8.1% in 2010 and then fall to 6.1% by 2015, CIPD, working on “only slightly less positive” growth predictions, says it will peak at 9.5% – or 2.95 million unemployed – in 2012 before falling to 8% by 2015.
Dr John Philpott, chief economic adviser at the CIPD warned that Britain is standing on a knife edge whereby anything other than sustained and consistent recovery that matches optimistic estimations could be catastrophic for the UK job market.
“Against the backdrop of massive public sector job downsizing it doesn’t require anything like a double-dip recession to cause a serious prolonged jobs deficit, merely economic growth in the range of 2-2.5% per annum rather than the +2.5% (above trend) annual growth rates the OBR expects and the coalition government is hoping for,” he said.
“A slightly milder growth outcome – which many would consider a decent recovery in output given the various strong headwinds at present facing the economy – is easily as imaginable as the OBR’s central forecast and would leave unemployment still close to 2.5 million by 2015, meaning Britain faces at least half a decade of serious prolonged jobs deficit. So will, fiscal pain spur private sector jobs gain, as the coalition’s economic strategy assumes? Yes, but probably not very much and certainly not any time soon.”
