Unemployment set to hit 17-year high

The Private sector 'cannot absorb government job losses.'  Claims the Independent today. It reports that

“Fresh doubt is cast today on government claims that the private sector will be able to absorb the 330,000 jobs ministers admit will be lost in the public sector by 2015.  According to a major report, unemployment next year is predicted to soar to a 17-year high of 2.7 million, which will add to fears of a "jobless recovery."

The Independent quotes the Chartered Institute for Personnel and Development, representing the nation's human resources managers which reports that

For those still in work, wage rises will run far below the level of inflation.

Job losses in central and local government will be higher than those envisaged by the Office for Budget Responsibility.”

The pace of private-sector job creation will also be slower than the government forecast.

Public-sector employment will fall by 120,000 in 2011 – and private-sector employment will also decline by 80,000.

Private-sector jobs that are created tend not to be secure, well-paid positions with benefits such as a pension linked to salary and generous paid holidays.

Many of the new private-sector jobs created during the recovery so far have been part-time, temporary and casual in nature,

Of the 350,000 fresh private-sector posts registered by the Office for National Statistics between the first and third quarters of this year, virtually none was full-time.

Around 1.6 million Britons are officially classed as working part time or temping because they cannot find suitable permanent work.

Jobs will be in the wrong places and require the wrong skills from the point of view of public-sector staff now facing redundancy.

The damage to living standards, for those hit by redundancy over the next few years and unable to move for family reasons or because of the level of house prices in the South-east, where most of the jobs are likely to appear, will be devastating.

Even for those able to cling on to employment, 2011 will see their living standards undergo one of the toughest squeezes since the end of the Second World War.

The Report concludes

“Combating the resulting regional and local jobs deficit will require a much more detailed and comprehensive strategy for economic growth than anything the Coalition Government has so far shown any signs of formulating.”

"Add in the possibility of employment disputes and social discontent arising from the fiscal squeeze and public-sector job cuts, and it's not hard to conclude that 2011 could prove to be a troubled year all round."