Growth from stagnation

[rov1100]

How is it possible for the country to grow if a proposed 500,000 are soon to lose their jobs?

You would suppose those about to be unemployed could be consumers who add to the growth. Not to mention those in work who have their incomes cut.

http://www.bbc.co.uk/news/uk-politics-12362722

[Old_Geezer]

Contracting the labour force will not cause growth, but the argument would be that it may be necessary to shrink back to get a better basis for growth later. Not sure how well that applies in the public sector though, since those out of work will claim benefits so it isn't even a complete saving for the public sector.

[Zeuhl]

Apparently a growing Private Sector will absorb the redundant Public Sector workers.

Yeah right. I can really see that happening.
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[Sqad]

Zeuhl..........yes I tend to agree with you, but I saw a woman from the private sector (cant remember her name or who she represented) but said that 500,000 unemployed absorbed into the private sector was "no problem" and that this had been going on for more than a decade.

Time will tell.

[Zeuhl]

Fair enough Sqad, we shall see. Maybe i'm prejudiced.

But if my tax inspector wants to flip burgers at McDonalds I'm very happy for him.
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[Sqad]

Zeuhl..;-)

[modeller]

It is nonsense to say that if you lose thousands of jobs from one industry they will be absorbed by another. There are many skills, probably most skills, that are not transferable . At the moment the biggest loses are in the public sector and they will find the most difficulty in finding alternative employment.
Just because you are in teaching , planning , design , taxation , social services, etc. it doesn't follow those skills can be used in business and definately not at the same salary.
.
For years successive governments made more and more jobs in the public sector as a method of absorbing unemployment caused by the decay and closure of our coal, steel, and shipbuilding industries . As a result in the NE 65% are employed in the public services .
which now are going to be badly affected.

[rov1100]

///Contracting the labour force will not cause growth//

I have never known Britain to have achieved more than about 2% growth in any year. Compare that with China which is getting 10% or thereabouts. Admittedly starting from a lower base helps but haven't they achieved this by sweated low paid labour? If the Tory policy is to make many redundant so causing a huge rise in the labour market all fighting for the available jobs going they could achieve a similar work ethic.
They have said so themselves that living standards are going to fall for all of us. I assume that Keynesian politics is now out of the window and we are back to Milton Friedman's politics of monetarism?

[rov1100]

///Just because you are in teaching , planning , design , taxation , social services, etc. it doesn't follow those skills can be used in business and definately not at the same salary///

Yes, very unlikely to get back into their old vocation in the private sector. There are going to be a large number of professionals (square pegs) trying to fit into round holes which could lead to resentment, apathy and many exiting from the job market altogether. Each of them are probably house owners with a mortgage. But wait a minute isn't that the problem that caused the previous banking crisis when mortgages were defaulted on?