Are we facing a jobs meltdown?

Aug 29 2008 by Nic Paton Print This Article

Amid growing signs that the global economic slowdown is getting worse, a key Bank of England policymaker yesterday predicted that 2,000 people would lose their jobs every day over the next four months.

The comments by Professor David Blanchflower came just a day after research from the union body the TUC suggested that more than 3.3 million workers, or 13 per cent of the workforce, were not confident they would still be in their job in a year's time.

At the same time, Canadian workers have been warned that they may be facing substantial job losses over the next few months as their economy sees an "historic" softening.

Erin Weir, a labour economist with the United Steelworkers, told the newspaper The Canadian Press that the worsening global economic picture and skyrocketing fuel prices would mean things were likely to get worse before they got better.

And, while the U.S economy grew by a surprisingly strong 3.3 per cent in the second quarter, news agency Reuters has been predicting the country is likely to be heading for a recession by the end of the year.

Martin Regalia, vice president for economic policy at the U.S. Chamber of Commerce, told the agency he predicted a recession by the year end, though it would a relatively mild and short one.

Within the UK, Professor Blanchflower's comments, if they come true, would take unemployment levels to their highest since Labour came to power in 1997.

Blanchflower, an economics lecturer at Dartmouth College in the U.S, also warned his original forecast that house prices will drop by 30 per cent might now be "optimistic".

"I am expecting to see a number of something like two million by the end of the year. School leavers are coming into the jobs market and there are no jobs for them," Blanchflower told Reuters.

"People have to start to respond to the fact that we are in a recession and the danger is that we will be in a very serious and long-lasting recession unless we do something. I certainly think we are in negative growth now and I expect several further quarters," he added.

The TUC study, meanwhile, has found that Workers in Wales were the least confident of keeping their jobs, with a fifth saying they were "not very confident" or "not at all confident".

Workers in the East of England were the most optimistic, along with workers in London, Yorkshire and the West Midlands.

TUC general secretary Brendan Barber said: "These poll findings show just how many people are getting worried about losing their job in the current economic slowdown.

"Of course this does not mean that unemployment will rise by anything like three million, but it does show just how jittery people have become about the economy and their own job," he added.

"The economy will inevitably slow this year and next, given the credit crunch and the impact of higher oil, food and commodity prices. But there is a real danger that if everyone thinks that the downturn will be deeper than it needs to be it will become a self-fulfilling prophecy," he continued.