Recession is predicted to cost Britain 1m jobs

I am sure that things will turn out to be much worse than what this report predicts because the economic crisis has just begun.

• Businesses call for minimum wage freeze
• Report warns of ‘winter surge’ in unemployment

Next year will be the worst for jobs for almost 20 years, with a net reduction of at least 600,000 people in employment, according to a report published today.

The Chartered Institute of Personnel and Development (CIPD) is predicting a “winter surge” of redundancies in the first quarter of the year that could see as many as 300,000 lose their jobs.

The institute warned that unemployment would continue to rise in 2010, taking the total number of jobs projected to be lost over the course of the recession to about 1 million.

In another sign of deteriorating confidence in the economy, the British Chambers of Commerce called for the national minimum wage not to be increased in 2009 to ease pressure on employers.

The warnings come amid a series of high street collapses. Yesterday, the children’s clothing retailer Adams called in administrators.

The CIPD’s annual Barometer Report, published today, predicts a net reduction in jobs of 600,000 next year – after 150,000 this year – and a further 250,000 to come in 2010.

The CIPD’s chief economist, John Philpott, warns that the period between new year and Easter will be the worst for redundancies since 1991, with up to 300,000 losing their jobs. This figure excludes jobs that may be created in that period.

The report, which surveyed 2,604 employees, also found employees felt little enthusiasm about their pay prospects. More than half the respondents expected to have their pay cut, frozen or increased at a lesser rate than this year.

Philpott said: “This time last year, in the face of some scepticism, the CIPD warned that 2008 would be the UK’s worst year for jobs in a decade. It was. But in retrospect it will be seen as merely the slow-motion prelude to what will be the worst year for jobs in almost two decades.

“Overall the 18-month period from the start of the recession in mid-2008 until the end of 2009 will witness the loss of around three quarters of a million jobs, equivalent to the total net rise in employment in the preceding three years.”

The Bank of England’s labour market expert, David Blanchflower, has predicted that unemployment would top 2 million by Christmas, rising to 3 million next year.

Thousands of jobs have been lost over the past few months and the situation is expected to get much worse. Around 27,000 workers at Woolworths are facing redundancy as the company closes its doors for the last time.

The BCC, which predicts unemployment will reach 3 million by 2010, claims things could get even worse if there is any increase in the minimum wage. It has written to the government’s advisers at the Low Pay Commission to urge that the minimum wage is kept at current levels – £5.73 an hour for adults, £4.77 for 18-21-year-olds and £3.53 for 16-17-year-olds – until economic conditions significantly improve.

The BCC argues that businesses would be left with a £300m bill next year if the minimum wage rose at the same rate as this year.

“We’re not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it,” said director general David Frost. “Most businesses are prioritising survival at the moment. A rise in the minimum wage would not help firms hold on to staff and would simply add to unemployment.”

The problem of unemployment is not confined to the UK. The Organisation for Economic Co-operation and Development said last week that 25 million jobs could be lost around the world as the financial crisis worsens.

Kathryn Hopkins and Chris Tryhorn
Monday 29 December 2008

Source: The Guardian

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