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Tuesday 27 September 2011

Creating the right jobs is harder than it looks

In his weekly City AM column, Anthony Evans compares the US and UK job markets and asks: "Why has unemployment remained so persistent?"

"The UK is facing a similar problem to America, with unemployment rising from 5 per cent at the beginning of 2008 to almost 8 per cent in the summer of 2009, staying at that level until now. Why has unemployment remained so persistent?

"Some economists will point to a collapse in aggregate demand – a lack of spending that is keeping output below its full employment rate. Some will focus on the supply side – the regulations that make it prohibitively costly to hire new workers, or a deficiency of the right skills. Others might stress expectations, and how it is unlikely that firms will make long term hiring decisions based on temporary policy changes. All of these views are important, but there’s another to consider."

To read the rest of the article, please visit City AM online.

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