Saturday, 31 January 2009

Unemployment Figures

Unemployment figures were released on 23rd January 2009.

It is no surprise that unemployment figures are showing marked increases. 1.92million people are now claiming Job Seekers’ Allowance  UK wide with around 100,000 of those in South Wales. These are the highest figures for many years. Quite how many years, is given differently by different commentators. 1999 and 1985 are both being bandied about with some excitement.  Part of the problem is that the government has altered the way such statistics are gathered and presented over the years and it  is difficult to compare like with like.

All this is little comfort to anyone who has been made redundant and is worried how the bills are going to be met. So too is the juvenile questioning by the TV newsreaders asking correspondents around the regions such gems as “ How is unemployment affecting your area?”

The answer is the simplest economics of course. The circle looks like this and it doesn’t matter where you join in. A company finds its goods are not selling and possibly also it is having to pay more for goods brought in from abroad so it jiggles the price for its goods. That means it has less profit and less to keep its business running. If it is unlucky it gets caught by someone defaulting because they have gone out of business, and the company’s own demise is accelerated. To conserve the business it makes people redundant and cuts costs wherever it can. Those people no longer have a wage and so they spend less. Even those with a wage downgrade their thinking generally by not spending unnecessarily or going for cheaper alternatives and so the retail outlets suffer. They buy less from the wholesalers and the manufacturers and round we go again.

There is not one circle of course, but many interlocking ones.  The whole economy is a ball of knitting  which is doing its best to unravel. With sterling going even lower to a rate of $1.37 any firm trading in Dollars for its incoming materials or goods has had at least a quarter lopped off its available margin for profit. Either that loss is swallowed or its prices have to alter.  If every manufacturer had exactly the same sums to do at identical times it would be a manageable problem. They don’t of course and competition is suddenly very difficult to predict.

The unemployment figures are just a part of the story. Someone has counted the job vacancies and it appears Newport has 2000 at the moment. Completely full employment is impossible. There is always a lag accounted for by those moving away, or new jobs not yet filled etc. Those 2000 jobs might have a high number of requirements making them unavailable for many. You always have questions when statistics are thrown up for inspection.

But when one door closes.... Not easy to see sometimes but now might be a great time to go self employed and try that plan that has always lurked in there somewhere. If the idea is good and properly planned and soundly implemented it may be the way forward. Get help from Bob Shepherd Associates. Be aware that although the basic stuff is for free there are limits to its effectiveness. See other articles covering a similar message.

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