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500,000 public sector jobs at risk

Once we’ve decided to which political party we are going to say “squeeze me I’m yours”, we are then going to be well and truly squeezed. And those in the public sector are going to be squeezed more than most.

This prospect has led the Chartered Institute of Personnel and Development (CIPD) to say that more than half a million public sector jobs could be axed in the next five years.

This could lead to a 10% reduction in the public sector workforce which currently stands at 5.8 million.

John Philpott, Chief Economic Adviser for the CIPD said that it was “misleading” to suggest that the pain of job losses could be eased by a combination of pay cuts or short-time working.

He said: “This strategy has been successful in the private sector during the recession as a means of avoiding redundancies during a cyclical downturn in the economy but is not an effective response where long-term structural change is involved.

“An economy with almost 30 million people in work and in which tens of thousands of jobs are lost and created every year should be able to cope with a period of large scale public sector downsizing without this resulting in higher unemployment.

“However, a favourable outcome depends on a return to health of the wider economy and increased demand for labour from the private sector.”

In fact the UK has been applauded for its flexible labour market in the private sector, which has resulted in much lower unemployment than had been anticipated during the recession. This was due to many employees agreeing to short-time working, pay freezes and even temporary pay cuts.

However, the monolith that is the public sector has been virtually unscathed during the crisis, with increases in average earnings far outstripping those seen in the private sector. All political parties are saying that they will tackle the structural problems of the public sector. The private sector was squeezed during the recession, and the public sector will be squeezed during the recovery.

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Posted in Earnings, Employment, recession

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