Why Falling Unemployment Can Be Bad News For Everyone

the void

economic-inactivity Economic inactivity by reason (aged 16 to 64)

More people are in work than ever before claim the DWP triumphantly as the unemployment figures show another huge rise in self-employment.  Whether these people are making any money, or whether they are pensioners with an ebay hobby, does not seem to matter as the Tories attempt to spin that Iain Duncan Smith’s welfare reforms are working.

Yet all that has happened is the economy has started to grow a bit and so unemployment has fallen a bit.  This is what always happens when economies start to grow – and due to a rising population there are almost always more people in work than ever before unless there is a severe economic downturn.  It matters barely at all what governments do to unemployed people – in a recession unemployment goes up, and in a recovery it goes down.  This is because unemployed…

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