The problem of unemployment and the inadequate solution of workfare

There has been a lot of coverage recently about workfare, which if you don't know is a scheme to get unemployed people into work placements. It is controversial for a number of reasons, 1 it is working for Job Seekers Allowance alone, 2. it is widely disputed that it is voluntary, 3. multi million pound companies are supplied with government paid workers, 4. most participants don't get a job at the end, 5. it gives paid work to unpaid workers. There is a lot of rhetoric surrounding the scheme from the left it is blasted as slavery and likened to workhouses and on the right opponents have been called Trotskyists! and George Eustice even claimed opponents were communists! The slavery claim is a bit out there but at least has some basis in fact what opposing working for benefits has to do with communism is bizzarely outlandish at best.

Anyway I digress, the real and present problem here is not whether this scheme works or whether it will help solve unemployment but the disparity between vacancies and potential employees. Take for example here in Cornwall, statistics on the Cornwall Council website reveal that in last December that the number of registered unemployed people was 10,220 (with the note that this is most likely an under-representation of the figure). The same document reveals that there were 2,057 vacancies, we can use extreme rhetoric all we want about the causes of unemployment and the solutions of Westminster but the simple fact is that there are 5 times as many people looking for work as there are vacancies. The research also reveals that the claimant count is up 589 (6.1%) whilst the number of vacancies has increased (+252 14%) there is still a massive gap. In simple terms there is simply not enough jobs and there is little indication that the situation will get better.
(Figures taken from the Economic Intelligence section of the CC website Jan 2012 report)

The problem of the lack of jobs is very much linked with de-industrialisation, we now live in an era where we don't by and large produce things. Here in Cornwall we no longer employ thousands of workers in mining, quarrying, engineering, fishing etc. We now live in a Thatcherite era of service industries, which although produce high profits do not need workers on anything like the scale of the old industries. Government policy of the last few decades has moved the British economy to a non-industrial footing where workers are simply not needed on a scale they previously were. This is unfortunate not only for it's effect on the labour market but also on the wider economy, with the weakening of the pound over the last few years there are very favourable conditions for exports (but unfortunately not for our import based economy).

The real challenge for Westminster is how to create jobs, shuffling people in and out of placements may look good on paper, it may give the chattering classes a chance for hyperbole and argument, but it doesn't address the problem of too many workers not enough work. What is need is investment in labour intensive industries, to bring wealth, to bring employment and to drive up wages.