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Unemployment Comments

Unemployment Comments
REC warns that trade union proposals could kill off green shoots in the labour market
The REC has warned that the first signs of recovery in the jobs market could be jeopardised by a heavy-handed implementation of new EU regulations that could restrict the flexibility of the UK labour market.
Commenting ahead of todays motions on agency work at the TUC Conference, REC Chief Executive Kevin Green says:  One of the key themes at this weeks TUC conference is how to safeguard jobs from the winds of recession. The irony is that some of the Trade Union proposals for implementing the EU Agency Workers Directive would have the perverse effect of limiting job opportunities. 
It is important that all types of jobs, including temporary ones, are considered within the employment debate. Temporary work is a valuable lifeline for people out of work and valuable stepping stone into permanent work.
The September REC Report on Jobs showed that temporary and permanent placements were beginning to rise after nearly 18 months of decline. The Government should resist calls for early implementation or any gold plating if it wants to cultivate the green shoots in the UK jobs market.
This afternoon, the TUC will be discussing the Agency Workers Directive amidst  calls from GMB and Unite to implement the legislation at the earliest possible date in April 2010. However, the Prime Minister has already indicated in his speech at the TUC on Tuesday afternoon that this timescale will not be met. The REC and other business bodies have called for the new regulations to only come into force at the last possible moment  which is December 2011.
Commenting on todays labour market statistics, Ian Brinkley, associate director at The Work Foundation, said:
All the recent talk of recovery is clearly very distant from whats happening in the labour market. If the experience of previous recessions repeats itself, it will be between 8 and 10 years for employment to recover to its previous level it could be either 2016 or even 2018 before employment recovers fully. However, employers seem more reluctant to shed labour than in previous downturns so employment may recover faster than in previous downturns.
The employment figures using International Labour Organisation (ILO) definition shows nearly 220,000 jobs were lost comparing the three months to July with the previous three months. Many more people are losing their job than are signing on, which is rather different than in previous recessions. Losses have been concentrated among men holding full time jobs in the private sector. In contrast, part time jobs, self-employment and temporary jobs have been relatively unscathed.  The figures also showed that young people under 24 continue to see disproportionately large job losses, but we are also seeing significant job losses in older workers as the labour market recession continues to spread and deepen.
Manufacturing employment losses slowed in the quarter to June, but for the first time in the downturn we saw significant falls in total employment in construction. This heralds continued significant job losses to come as the big falls in construction output work their way through.  
In contrast, employment associated with the public sector grew public administration, health and education services went up by over 40,000 on the quarter to June.  These figures also include people who work in health and education services in the private and voluntary sectors. The ONS has also published separate figures on the public sector headcount. However, the total figure is misleading, as the ONS includes financial institutions such as Northern Rock, Bradford and Bingley, Royal Group of Scotland and Lloyds Group in the public sector total. So although the overall public sector total looks as if it has gone up since Autumn 2008, much of it is probably because of the inclusion of these bodies in the statistics.
This makes perfect sense from a statisticians point of view, as these bodies are now officially classified as public institutions. But it means that even more care will have to be taken with the public sector job statistics than in the past so we can distinguish between, say, changes in employment associated with reduced funding for public services and changes in employment caused by the temporary acquisition and subsequent sell-off of financial institutions by the public sector.
Association of Graduate Recruiters responds to youth unemployment figures
Unemployment up 5% for 18 to 24-year-olds
Unemployment for 18 to 24-year-olds was 731,000 in the three months to July 2009, up 36,000 (5%) from the three months to April 2009.
Responding to todays Labour Market Statistics, Carl Gilleard, Chief Executive of the Association of Graduate Recruiters, said: While these figures are disappointing they certainly should not prevent young people from continuing to invest in higher education. There is a great deal of evidence to suggest that those with qualifications are less at risk from unemployment in a recession and better placed to take advantage of an economic upturn when it comes.
Mervyn King
Bank of England
Threadneedle Street
16th September 2009
Dear Sir
I note your comments following this weeks news regarding growth in unemployment, tempered by some encouraging reports, including a rise in the Retail Prices Index.  As always, I read your observations with great interest: they tend to be accurate and often prophet like.
I have worked in the Recruitment industry in the South East of England for 21 years.  I do have sympathy for many of those who are currently unemployed, particularly certain people in certain sectors.  I agree that unemployment will continue to rise, even whilst the economy, in general, slowly recovers. 
However, what I am not prepared to agree with is a straight forward explanation of unemployment growing due to organisations shedding staff.  It is correct that more employers will make more staff redundant over the next few months.  Conversely, there are other companies employing new staff.  This may not be at the same volume as in previous years, but the fact is that they are recruiting.
The unemployment figures are exaggerated and inaccurate as there is a huge difference between those who are jobless and are desperate to find work, and those who are jobless but happy with the status quo.  In the last 24 hours we have offered both permanent and temporary job opportunities to jobseekers that have refused to attend interview.  These are people with a variety of excuses, including:  a 12 minute journey to work by train is too far for me, its not financially worth it to me and the offices are not on a very good bus route.
There is clearly a difference between the unemployed who cannot find a job and the unemployed who simply cannot be bothered to find work.  I do not know what the solution is: let us just hope that the Government has some sort of clue!
Yours faithfully
Andrew Kaltz
Managing Director
EMPLOYERS URGE GOVERNMENT TO USE TAX BREAKS TO BOOST EMPLOYMENT On the day that the unemployment count has reached 2.47 million, over half (59%) of Finance Directors surveyed have backed a call for a year's holiday from National Insurance Contributions (NIC) payments when taking on the long term unemployed in a bid to get people back into work, new research from leading business and financial advisers, Grant Thornton has shown. Ahead of the autumn party conference season, Grant Thornton has compiled a tax manifesto setting out pragmatic tax changes and polled a community of 500 Finance Directors to gauge what measures the business community would welcome to increase confidence in the economy and enhance the UK's reputation as a competitive business environment. The Finance Directors called for a one year NIC holiday when hiring employees who have been unemployed for more than 12 months. Grant Thornton's tax manifesto proposes that the NIC payments for all workers should be scaled and paid later on in the employee's working life when it would be more affordable for individuals to pay. The manifesto also proposes that companies that employ younger entrants to the workforce should also be awarded a temporary NIC holiday in an attempt to deal with the desperate state of youth unemployment. "One of the legacies of this recession is large scale unemployment. The direct costs, in the form of benefit payments and lost taxes, when coupled with the human costs to the unemployed and their families, places this at the top of any political agenda," says Francesca Lagerberg, Head of Tax at Grant Thornton. "Our survey shows that both employers and employees require urgent assistance from the Government in getting people back into work. This conference season will be a prime opportunity for the three main political parties to set out their stall on how to reduce the rate of unemployment and boost morale in the workplace," continues Lagerberg. Furthermore, nearly two thirds of Finance Directors (73%) would like to see more training in the workforce paid for by the employer with the employer benefiting from tax incentives. The manifesto proposes that the Government needs to promote the current and generous tax relief available for work related training. This would allow full tax relief for any costs involved in equipping an individual with the skills they need to do their job and would be much broader in application than the very traditional job-based qualifications. "Solutions need to be devised urgently before more businesses and individuals suffer further and the UK economy is permanently scarred." concludes Lagerberg.


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