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Decrease in Unemployment Across the Board (11/09/13)

"The number of people claiming Jobseeker's Allowance in July was revised downwards. The fall of 68,900 in July and August was the biggest two-month drop since June 1997". [BBC News]

On 3rd July, I started implementing my business by visiting the Aston Ward Councillor, Mohamed Afzal in Birmingham. At the time, he was very despondent about the economy and unemployment and mainly blamed the Government for it. Since then, we had the biggest fall in unemployment since 1997. Coincidence? Maybe, but I reckon that my solutions are being taken on board.

In my report to the Councillor, I mentioned that I'm planning to form a company which will build relationships with politicians, employers and the unemployed with the idea what employers need and ensuring that the unemployed meet the criteria of their potential employers. The Councillor claimed, that there are few jobs to go round and that consumers have reduced incomes which led to a reduction of their "buying power".

I concluded that we have a vicious economic cycle in that employers are reluctant to expand because of a lack of demand; and consumers are reluctant to spend because of the bleak economic outlook. I proposed that the consumers must be made aware of their part in the solution of this difficult problem. It seems that the players in the economy have followed this advice even though I haven't said anything.

    I've read reports recently about macroeconomic imbalances that need to be addressed:

  1. High household debt in terms of mortgages and high property prices relative to incomes
  2. High Corporate debt that cannot be sustained - some companies do not earn enough to pay back their debts
  3. Weak productivity; declining share in the export market; weak sterling
  4. High budget deficits (though declining) leading to increasing National Debt.

Item 3 is interesting in that weak productivity led to a decline of the share of the export market despite a weak sterling. Normally, when the currency is weak, export products become cheap to foreign countries. But the UK either didn't pay attention to this or that the fact that they couldn't meet the demand due to weak productivity, led their customers to go elsewhere.

Economic reports came out this week which show that the economy grew strongly in the 2nd quarter across the board which explains the strong fall in unemployment I mentioned earlier. The OECD have revised their forecast for UK GDP from 0.8% to 1.5% in 2013. We need equally strong economic figures in the 3rd quarter out in November/December.

What I'm going to do is to visit the top 20 employers in Aston; interview members of the public regarding the effects of unemployment on their lives; and recruit 5 unemployed people to help me set up the Aston branch of FullEmploy. I'll report the outcomes when I see you on 2nd October.



 

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