2017 INDEX

The robots are coming


Mind the gap! Can the public sector make up for dwindling private sector job opportunities?

The logical response to an imminent threat to employment prospects would be to decrease the size of the workforce, or increase economic activity.

This is what would have happened during the social democratic concensus (roughly between 1945 and 1975) when we lived in a relatively high growth world.

Thanks to Reganism/ Thatcherism (otherwise known as economic liberalism) growth rates have been much lower since about 1980 and there seems to be no hope of increasing economic activity as a route out of mass unemployment.

The reasons for low growth are many and varied: creative destruction so lauded by extreme right wing economists might not actually be as creative as it is said to be (LOL) especially in an era of increasing automation; the transfer of wealth from the many to an extremely small elite might be a drag on demand since there is a limit to the amount of mass market goods billionaires can consume.

Whilst the causes may be many and complex, there is little doubt that economic liberalism results in lower growth rates. Evidence for this, if it were needed, can be seen in the fact that ten years after the economic collapse of 2007/8, the Bank of England was still trying to stimulate demand by Quantitive Easing (QE). If growth rates were adequate why would it need to stimulate demand in what must be one of the peak years of the up side of the economic cycle?

If increasing economic activity can be ruled out as more or less impossible without returning to the era of high inflation, how about the option of decreasing the size of the workforce? The government could do this quite easily by increasing public sector employment and cutting the pension age.

Everyone (well certainly everyone aged 50 and above) knows what's been happening to the pension age. It's going up. The excuse has been the entirely false baby boomer fantasy. The following graph shows what's been happening to public sector employment as a per centage of the total workforce.

Is this crass stupidity or is it class war with the ruling elite deliberately spiting their own interests (since they mainly own the companies unable to grow through lack of demand) by squeezing every last drop of vitality out of the economic system?
UK Public Employment as % of total employment, ONS
UK Public Employment as % of total employment, source: ONS.