Sunday 18 October 2009

The Real Level of Welsh Unemployment

In the week the BBC reported on the newly released figures for unemployment in Wales. In the space of 3 months it's jumped from 106000 to 130,000, the highest jump in the UK. As the BBC usefully informs us "the last time unemployment was this high was in 1993".

Which puts us squarely back into the good 'ol days of Tory government.

Of course, back in those days Labour were routinely jumping up and down and screaming "fraud" whenever the unemployment figures came out, as it was generally accepted that the Tories had been fiddling the figures to disguise the huge structural unemployment they had created in the 1980s, when they shut down huge chunks of our manufacturing base. A 1997 report by Sheffield Hallam University that looked in detail at this practice was requested for circulation amongst Labour MPs by the then Shadow Chancellor, Gordon Brown.

Unfortunately for Labour, Sheffield just kept on producing these wonderfully insightful reports. And what they essentially documented was that Labour had retained the Tory practice of fiddling the figures. The most recent report, in 2007, documented a real unemployment rate of 2.6 million, when the claiment account was barely a million people. This figure included a "hidden" unemployment rate amongst the UK's incapacity claimants of around 1 million people.

So let's do a little math, as they say in America.

Sheffield Hallam estimated that this hidden figure was concentrated across the older Industrial areas of the UK, including, of course, South Wales. Areas like Merthyr were notable examples.

However, if we generously assume that as we have approximately 1/20th of the UK's population, we will take 1/20th of the "hidden" incapacity figure, that makes for 50,000 people. It's not likely this figure will have changed in the last 2 years as it's basically structural, and not linked to the "boom and bust" cycle that Broon claimed to have abolished.

We add that 50,000 to the 130,000 "official" rate, and we have 180,000 people out of work, still in all probability a gross underestimate. It works out at a real unemployment rate in Wales of at least 12.6%.

So after 10 years of Labour rule, we are pretty much back where we were in the mid 1980s, under the Tories. The Tories threw huge numbers of people out of work, and Labour have done so too. And like the Tories, Labour have decided to disguise the real figures to suit their own cynical political ends.

You can guarantee that Brown, who's Thatcherite deregulation of the financial system has led us to the current mess, won't be requesting the newest version of Sheffield Hallam's report, which shows a real unemployment rate of 3.4 million people for the UK as a whole. Ideally, it should be stuffed down the greedy gullet of every grasping MP in the whole sorry edifice that passes for the "Mother of all parliaments".

The least we can do next year is add 600 to this sorry, growing tally of human misery.