Private sector may take 14 years to return employment to pre-recession levels

It could take as long as 14 years for the private sector to create enough jobs to return employment to pre-recession levels, according to research released by the TUC today.

The analysis, which casts doubt over government claims that the private sector will create enough employment to counter forthcoming public sector jobs, warns that it will take more than two decades in some regions to make up for the jobs lost in the recession and those to come from austerity measures.

The TUC report shows that more than 1.35 million private sector jobs have been lost since the official figures for jobs peaked at over 31 million in the second quarter of 2008.

With a 10% decrease in public sector employment to come, according to the Office for Budget Responsibility, around 2.2 million private sector jobs will need to be created to get the labour market back to pre-recession levels, the TUC says.

The analysis calculates that as private sector employment growth has averaged 0.7% a year over the past decade it could take up to 14 years to generate 2.2 million private sector jobs and far longer in some regions of the UK.

At this rate it could take Yorkshire and the Humber and the North West up to 24 years to return to pre-recession job levels, the report warns. The West Midlands has seen no private sector employment growth over the last decade and it is therefore impossible to predict when, if ever, unemployment will fall significantly in the region, it says.

The research was released ahead of the TUC Congress, which starts on Monday and will see the union body launch a campaign to make the Government “think again” about its economic policies.

TUC general secretary Brendan Barber said: “When the spending cuts start to bite and public sector job losses begin in earnest the Government tells us that the private sector can make up the difference. But there are already many people who have lost private sector jobs chasing every vacancy.

“And of course spending cuts will cause further private sector job losses, not just because the state will buy fewer goods and services, but those who lose their jobs will stop spending too. Even if the private sector does better than in the past, the spending cuts will condemn us to high unemployment for the foreseeable future.”

In June, the think tank Centre for Cities warned that the Government must focus on nurturing private sector employment in cities reliant on the public sector before trimming back government jobs.

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