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July 13, 2006



Now that the really preposterously subsidised industries have been junked - e.g. coal - that idea sounds worth an investigation. Perhaps a few more would have to be binned before such a scheme could work e.g. the BBC, the paper Press.

angry economist

The NO. 1 ILLUSION for me is that the labour market is static. As you allude to Chris - the labour market is a constant dynamic of flows.

In fact in the First Release you link to ...
- unemployment increases
- employment increases
- claimant count increases
- no. of economically inactive decreases

Points to an expanding labour supply, with a reduction in economic inactivity.

If we can say anything - its perhaps that demand cannot cope with the the increase in supply, rather than unemployment is the result of a cut in demand.

Folks coming out of inactivity to join the labour market might signal a bouyant labour market amongst other things.

The labour market is dynamic and a series of flows. It has to be remembered. And to consider all elements of labour demand and supply in one go rather than plucking one indicator out fulminating half baked theories.

Some other useful references below.

P11 of this publication has a diagram which sums it all up well:


More detail here:


angry economist

"Illusion two - workers can control their own fate. This is the implicit message behind the belief that education and training are sufficient to equip people for the future. They are not."

Chris - I agree. Too often, the powers that be area preoccupied with the supply side of the labour market.

Whereas its more substantially about the demand side. You can supply all the skills you want, but if employers don't want them or won't use them they won't pay for them - it represents a loss on the state's, or individual's investment in them.

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