In October last year, writing in the Sunday Socialist, I commented: “Mortgage rates are linked to bank rates which, as we have seen, can rise rapidly based on a government policy of reducing inflation by reducing demand. That policy, incidentally, rarely works and just causes job losses.” Until recently it seemed that the effect of lowering inflation was not to cause a rise in unemployment. Or to put that in more personal terms, it looked like my assertion was unsupported by empirical data. Or if you prefer, it looked as though I was wrong.

Figures released this week, however, suggest that it was just necessary to wait a while for the effect of the high interest rates to filter through to the job market. A report on the BBC Website entitled: “Unemployment jumps as UK jobs market stalls”, which started on the front page but within a few hours was relegated to the Business Section, tells us that the economic miracle the Tories are gambling on for saving their electoral chances is not likely to materialise. Whilst inflation has fallen, the rate of unemployment has been steadily rising from 4% in January 2023 to 4.2% today. 

That is not a massive increase, but it means that 1.44 million people are currently unemployed, though those claiming benefit (the claimant count) is considerably lower than that. And whilst unemployment is on the rise again, meaning more families struggling to make ends meet, vacancies continue to fall. For the 21st consecutive quarter the number of vacancies has fallen. Currently, the 1.4 million unemployed are chasing 960,000 vacancies, most of which the majority of the unemployed are not qualified to take.

Unemployment, which peaked in 1983 at 3.3 million, which at the time was treated, rightly, as a public and political disaster, has reverted once more to being treated as a private tragedy to be endured by individuals and their families. 

At the same time as these figures are virtually absent from media coverage, almost all the main news outlets have a story on IMF estimates of growth being downgraded to just 0.5% compared to global growth, estimated at 3.5%. In other words, any success that the Tories are having in bringing down inflation is being bought at the expense of flatlining the economy.

Unemployment matters. Or it should. But Labour’s Acting Shadow Work and Pensions Secretary, Alison McGovern, said these figures revealed a “terrible cost .. to the taxpayer paying billions more a year in spiralling benefit bills.” As if it was that easy to actually claim benefits in a system which Philip Alston, UN Rapporteur on extreme poverty until November 2023, described as a “sanitised version of the 19th Century workhouse, made infamous by Charles Dickens”. As if the real story here was the cost to the taxpayer rather than the dreams of individuals trampled in the dirt by a system that cares nothing for ordinary workers.

Trade unions have rarely taken unemployment seriously, preferring to concentrate on their members in work. But unemployment is not an accident. Rising unemployment is there to prevent wage demands that rather than causing inflation, as the government and its apologists continue to claim, are a result of inflation eating into ordinary workers’ living standards. Unemployment and underemployment are not inevitable consequences of the system, they are conscious decisions to ensure the working class remember their place. It is in all of our interests to fight that mentality.


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