David Vance SubstackRead More
It is commonly understood that if socialists understood economics they wouldn’t be socialists. This remains true in pretty much all circumstances which brings me to the unemployment figures for young British people which were released yesterday.
Since coming to power, Labour has forced substantial increases in the minimum wage along with employer NIC increases and more “rights” for new workers. Anyone with half a brain would know where this would lead but it has apparently caused surprise in Government. They were too busy boasting of their largesse with other peoples money. The minimum wage has spiralled up by +11% and that carries consequences.
Among 16 to 24-years-olds, unemployment has risen to 16.1% at the end of last year, the highest it’s been in more than a decade! While for 25-34s it’s 4.7%, the highest since 2017.
This is entirely predictable. Employers are doing that which they have to do to sin order to survive and that means cutting employment around the margin. Why take a risk of a 20 year old? So they don’t. And Rachel Reeves seems shocked.
Such is the fear that has gripped Labour that they are now apparently considering dropping their manifesto to equalise the hourly job rate for 18-20 year olds with those 21+! They can see that whilst it might seen “generous” to force a wage increase through for the 18-20 year olds, it will be at the expense of jobs!
The other disturbing trend is that State sector workers are enjoying salary increases at almost twice that of private sector workers. (7% vs 3.5%) So Labour is robbing Peter to pay Paul in the hope that Paul will continue to vote for it. However if you cripple the wealth creating sector of the economy in order to reward the wealth absorbing sector, things will not work out well! Labour never learn and that’s because they are socialist incompetents.
