"No one... should be beguiled by claims that the economy is "starting to recover" primarily on the basis of rising employment levels alone, since this ignores the fact that the UK working age population has been growing consistently over time. No one would say Norway has a worse performance than Spain because it has only 2.5 million in work while Spain has 18 million. And the same applies to comparisons of UK performance over time when the population has been growing - by around 1 million since 2008 and by around 6 million since 1971. More people means more jobs, even in economies in neutral. So it makes little sense to compare performance, even over relatively short time periods, using levels when populations are changing.
The employment rate - ie the level divided by population - is a much better guide in these circumstances and that has been broadly flat, allowing for sampling variation, over the last three years - much more consistent with the flat GDP data. Add this to a fall in real wages in this downturn - not just at the bottom but across the distribution - which has traded off some jobs for incomes, unlike in previous downturns, and the employment puzzle becomes less of a mystery.
Professor Jonathan Wadsworth
Economics department, Royal Holloway College, University of London."
" If I employ a full-time worker at £12,000 a year, I pay a further £550 to the chancellor as my contribution to national insurance. When that worker leaves I can replace them with two part-timers at £6,000 and not pay any of that £550. If I replace three full-timers with six part-timers I save £1,650. If any one of those part-timers is sick or wants time off, I have five other experienced workers anxious to take up overtime and extra shifts. Further, my six part-timers are unlikely to become eligible for statutory sick pay because of "waiting day" arrangements. In addition, workforce turnover ensures they are unlikely to ever become eligible for redundancy payments if things get any worse than now.
Also, no one in Treasury forecasting seems to have noticed that when I convert three full-timers, as above, to six part-timers, the Treasury loses a total of about £5,400 in income tax, employee's and employer's NI. Thus we can have an expanding workforce that pays less tax.
Russ Russell
Weston-super-Mare, Somerset"
etc.,etc.
From...
http://www.guardian.co.uk/society/2012/oct/18/employment-figures-puzzle-solvedIgnorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
