Miracle claims that don’t add up

Fake villages were once built in Russia in order to fool an Empress into thinking things were much better than she had thought. Instead of a region destroyed by war, it all looked as good as new. These fakes became known as Potemkin villages after the man who built them. The ConDems have adopted a similar strategy in the run up to the election.

Unemployment is down, wages are rising slightly above inflation, except if you are in parts of the public sector getting one per cent or less. Britain is the jobs factory of Europe, says Cameron. So many more jobs can be created that we can, in effect, abolish unemployment. We’ve never had it so good. It’s an economic miracle in the face of austerity.

But something stinks at the core of the claims. With record numbers claimed to be in work – now over 31 million – there should be near record amounts of money from national insurance and tax flowing into the Treasury.

Of course the record employment is linked to the record population numbers.

Follow the money

And the 1.5m jobs the ConDems claim to have created should be producing millions in tax and national insurance. They should be. But it isn’t happening. The ConDems failed to hit their deficit reduction target partly because the money that could be coming in from all this extra employment isn’t there. Follow the money. The money doesn’t lie. And because they money isn’t there, the nature of the jobs created has to be questioned. We’ll return to that later.

And we’re getting better off say the ConDems. Wage rises are outstripping inflation for the first time in years. That’s only if you use the new ConDem measure of inflation known as the Consumer Price Index which shows inflation at half a per cent.

CPI was brought in as the favoured measure of inflation in the first ConDem emergency budget of 2010 as part of the process of ripping off those paying into public service pensions. The longstanding measure, the Retail Price Index, which it replaced, is running at 1.6 per cent. And the latest figure for pay rises show they now are running at 1.8 per cent annually.

Pay levels, are still 12.6 per cent lower than in 2010. At the current rate that wages are recovering against inflation – 0.2 per cent annually if you take RPI – it would take over 60 years for wages to recover the buying power they had in 2010.

Cameron calls for pay rises – that is apart from in the public sector, which he can directly influence, where the pay rise is one per cent or less. His message to employers: do as I say, not as I do.

And a new report from the Centre for Cities – Cities outlook 2015 – points towards an increasing north-south divide in terms of job creation. It found that “the UK has increasingly become a two-tier economy, with successful and dynamic cities in the South leaving the rest in their wake.”

For every 12 private sector jobs created in the south, one private sector job is lost elsewhere. The unemployment rate is running at 5.8 per cent, if you trust the figures. That is still above the pre-crisis rate of 5.2 per cent unemployment. The public sector jobs being lost outside the south are not being replaced by private sector jobs. It’s another ConDem myth, unless you are living in the south or London.

But the nature of these jobs has to questioned. Too many are National Minimum Wage jobs, often low skilled. Many are part-time with very limited hours or zero hours. These types of contracts often don’t create enough hours to pay national insurance or income tax. And they also create a precarious workforce with little or no job security, holiday rights or sick pay. They might technically be ‘jobs’, but not as we used to know them.
‘National scandal’ for young

Youth unemployment – those aged between 16 and 24 – is persistently high at over 750,000. That’s a rate of 16 per cent, nearly three times the adult rate. Even a quick glance through websites offering “apprenticeships” show many offering “pushing broom” jobs in hairdressers or burger flipping in pub “restaurants”. These pay apprentice rates of as little as £2.50 an hour. Hardly gold standard apprenticeships leading to a decent, well-paid job.

Anthony Curley, Unite’s national youth co-ordinator said, “Youth unemployment rates are a national scandal that risks condemning many young people to life on the margins. We need more high quality apprenticeships with well paid, high skilled jobs at the end of them.”

But the biggest Cam scam looks like it is the huge rise in self-employment and single person“businesses” which have grown – according to the official figures, by 750,000. UniteLive spoke to a jobseeker known by his twitter account @ImaJSAclaimant but we’ll call him “David”.

David, a Unite Community member, has built up detailed knowledge from his own experiences, from other JSA claimants who approach him and from Job Centre staff who are whistle blowers.

He told UniteLive: “I can’t remember the last time I saw a decent paid job, maybe two or three over a year ago. As a JSA claimant you are forced to use the Universal Job Match website to hit your target of making more than a dozen job applications a week.

“It’s all about a regime where quantity counts more than quality. Spending all that time hitting targets leaves little quality time to research the job market more fully. If you don’t hit your numbers you risk being sanctioned – having your benefits cuts. Its horrible and brutal.

“The jobs on the website are mostly national minimum wage, some don’t actually exist and some are just marketing by agencies. You can get so worn out by the horrible JSA regime that you will try anything to get away from it. When I mentioned some of my skills, the Job Centre said I should go self-employed which I tried. I did five pieces of work for five different people and ended up with £7.20, it was ridiculous.

Self-employed

“The self-employed scheme pushed by the JSA is questionable. Many self-employed people who contact me don’t earn any money and are living off tax credits. Technically, they are self-employed. Often that means they have no genuine employment at all, but are part of the alleged ‘jobs miracle’.

“But it’s better than JSA. I know unemployed people entitled to JSA who won’t claim because they can’t cope with the regime they will be put under where if you don’t do as you are told you can be sanctioned and lose benefit.”

Now new research from the University of Oxford and the London School of Hygiene & Tropical Medicine, published in the Guardian suggests people losing benefit simply disappear from the welfare system and could be relying on food banks. It supports what “David” had been picking up on the Twitter grapevine.

Professor David Stuckler, of Oxford University, is quoted in the Guardian saying that benefit sanctions “do not appear to help people return to work. There is a real concern that sanctioned persons are disappearing from view.”
Of two million people being “sanctioned” – losing their benefits – only one in five are getting a job. “If, as we’re finding, people are out of work but without support – disappeared from view – there’s a real danger that other services will absorb the costs, like the NHS, possibly jails and food support systems, to name a few,” he adds.

In the film the Eiger Sanction Clint Eastwood “sanctioned” his fellow climbers by throwing them off the mountain. In the IDS sanction he seems to be throwing claimants into society’s void.