Someone has hidden the unemployment,
so where is it this time?
My index of the labour market is simple and consistent: can you find a builder? (Answer: yes, I can, but I decline to publish his telephone number.) This is just as likely to be right as the published figures, which now show unemployment at its lowest level since the distant days of July, 1975. Ah, says Richard Jeffrey of Bridgewell Securities, the two figures do not compare, for in those days there was much more hidden unemployment. Hidden? In Fleet Street, so I recall, it was out in the open. If you held a union card, you could sign yourself in (`Mickey Mouse') and play a few hands of cards by the string-tying machine before collecting your pay-packet and heading home to keep an eye on your mini-cab business. This was unemployment, in all but name, but the benefits were paid by the employers. At Rolls-Royce Motors, there were 27 unions jostling for position, each of them insisting that this or that skilled job could only be done by one of their craftsmen, each with a mate from his own union standing by, holding an implement. On the commanding heights of the economy, the state-owned industries were entrenched in force. Later, under different ownership, they seemed to get along with about onethird as many people. The shock, though, came with the recession that followed Margaret Thatcher's rise to power and left many employers — manufacturers most of all — to sink or swim. 'Say what you like about her,a cynical chairman told me, 'but she has at least moved unemployment off the shop floor and into the streets.'
Stressed out
Now the streets are empty again, so what has become of unemployment? Are we all productively employed, or has Tony Blair put it somewhere else? One theory is that he has stuck a new label on it. An alarmingly large number of people now seem to be no longer fit for work, which means that they receive disability benefit rather than unemployment benefit. If they have been working in the public sector, they may be allowed to retire on a pension that meets them half way. This seems to happen to senior policemen. Perhaps they are stressed out. Stress is prevalent in the public sector, as the chairman of the Health and Safety Commission has been telling us. He thinks that this explains why workers in the public sector take more days off, pleading ill health, than their opposite numbers elsewhere. Could his Commission itself be in the public sector? You bet.
Who Needs It
Public bodies like this have increased and multiplied under today's government, and have done their bit to create employment, however stressful it may be. New jobs of new kinds come on offer every week. Has the Department for Constitutional Affairs yet succeeded in hiring a Director of Diversity? Will £75,000 a year and a matching pension be enough? The public payroll gets bigger and bigger, but what exactly does it buy? The Office of National Statistics has been telling us that each pound buys less than the last, as the public sector becomes less productive. The Chancellor, of course, has ordered up some new statistics, but while we wait for their arrival, we can look around for hidden unemployment. This, surely, is where it is hiding today: not on the shop floor or by the tying machine, but in some stress-laden office, short of staff (or resources, as they are called) because of sickies, well-meaning but fatally lacking in the Who Needs It factor, for which the test question is: however would we get along without them? It would take another shock — a critical strain, perhaps, on the public finances — to move unemployment out of the public sector and into the streets.
One's a crowd
Crowding out — now there's a blast from the 1970s. The government in (say) June 1975 had so many mouths to feed and borrowed so much money to feed them that it drove the price up. No other borrower could compete, and companies needing to raise money for investment or to stay alive complained that they were crowded out. Now they face overcrowding in the labour market. More jobs have been coming on offer in the public sector, and the rates of pay on offer have been rising with them. In the roaring '70s, wages and prices chased each other far up into double figures. This time, and with one eye on the consequences, the Bank of England notes in its Inflation Report that the labour market remains tight. If the Governor is looking for a builder, I may be able to help him.
Where there's a tip
Who'd have thought it? Companies sometimes give nice friendly access to those who write nice friendly things about them. Mr Softy, the analyst, is asked to lunch, but Mr Grumpy's calls are not returned. This has found its way on to the worry list of the Financial Services Authority, which has been telling everyone that it won't do. A copy of this notice, I imagine, will have been sent to the FSA's sponsors in the Treasury, and parked in the File and Forget box. Would the Treasury play favourites with information, even if this were price-sensitive? The question answers itself. If a nice friendly account of its putative plans were to leak out in the usual space, this would be just a coincidence, or a show of initiative by Mr Softy. The only catch about these mutually convenient arrangements is that they are subject to the law of diminishing returns. Once Mr Softy becomes Mr Patsy, his credibility runs away downhill. An old City proverb expresses this: where there's a tip, there's a tap. The FSA ought to remind us: cc. HMT.
Eton Blue Peter
Russia is a dangerous place to do business — being jailed, going bust or getting shot are just some of the hazards — but the unlikely secret, according to Bloomberg, is to be an Old Etonian called Peter. Three of them are chairmen of Russian gold mines: Peter Greenall, Lord Daresbury, at Highland Gold, Peter Hannen at Celtic Resources and Peter Hambro — but you guessed it — at Peter Hambro Mining. Their school must have taught them survival techniques, but so long as they stay away from politics and football, and keep on finding more gold, I expect that they will be all right.
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