Joblessness to near 3m, warns industry
WEAK economic growth means unemployment will keep rising into 2013 – and an overhaul of jobs regulation will do little to help, according to the head of a leading employment industry body.
Joblessness will rise from 2.67m currently to almost 3m, Chartered Institute of Personnel and Development (CIPD) boss John Philpott will say in a speech this evening, although a modest bout of economic growth would see employment stabilise at roughly its current level.
Despite predicting a rise in unemployment, Philpott believes private sector employers are in robust health, and labour market reforms are unnecessary.
“The buoyancy of private sector job growth following the recession has been masked by a sharp fall in public sector employment combined with a 600,000 increase in the UK labour supply,” the CIPD said.
“Even with the public sector job cuts, only 40 per cent of the net rise in unemployment is accounted for by a fall in the number of people in work – the bulk is accounted for by the increased labour supply.”
The problem is a lack of demand in the economy, Philpott believes – reforms to make it easier to hire and fire workers would simply “turn the clock back on employment rights”, he claims.
He will also argue that the 400,000 rise in numbers unemployed for more than one year is “a much better outcome than following previous recessions”.
“In the early 1990s when unemployment was last at a similar level to today, around 1.2m were long-term unemployed,” compared with 860,000 now.