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A Wave Of Unemployment Or A Dependency On State Aid In Britain?
Boris Johnson Government is currently facing a major dilemma…A wave of unemployment or a dependency on state aid in Britain?
Yazar: Tom Roberts
Yayınlanma: 13 Ağustos 2020 21:34
Güncellenme: 22 Aralık 2024 21:48
A Wave Of Unemployment Or A Dependency On State Aid In Britain?
Britain was one of the countries whose economy was most affected in the corona virus epidemic. According to the news in Bloomberg, the Boris Johnson Government is currently facing a major dilemma…A wave of unemployment or a dependency on state aid in Britain? Most of the salaries were paid by the state. However, this situation will continue until October. If the government withdraws this support too soon, experts say, the wave of layoffs will quickly spread across the country. Continuing aid is also a troublesome decision. In this case, there is a danger that state support will create addiction. It will also stand as a major obstacle to reforms necessary for the economy."ZOMBIE-ENTERPRISES ALSO PROTECTED"
Whichever of the two options is preferred, the cost will be substantial. Salary support packages implemented by the Minister of Finance Rishi Sunak have so far cost the treasury 35 billion pounds. The vast majority of other countries started loosening their quarantine measures in May. Britain waited until July 4th for this. In June, more than a fifth of the country's employees were temporarily out of work. “The state's salary support has also protected 'zombie enterprises', which are actually impossible to survive, said Jonathan Portes, an economist at King's College London. “Losing jobs and creating new job opportunities are a necessary part of dynamic economies” he added.IF UNEMPLOYMENT INCREASES, EXPENDITURES WILL DECREASE
The government's debt seems to exceed 100 percent of the economic output. Although the economy contracted 20.4 percent in the second quarter, it showed a promising recovery of 8.7 percent in June. Still, the Bank of England believes the strength and sustainability of recovery depends on 'jobs'. It was emphasized that if unemployment increases, people's spending will decrease. It was also noted that unemployed people will start to lose their skills after a while and this will harm social productivity.
40 PERCENT OF THE PEOPLE ARE FEAR BEING UNEMPLOYED
According to the data of the second quarter, the contraction in the food and accommodation sector was a record 86.7 percent. British people are extremely worried about the economy. 40 percent of British citizens surveyed on YouGov fear being unemployed. 60 percent expect the recession in the economy to last at least 18 months. “Unemployment is increasing day by day,” Tej Parikh, chief economist at the Institute of Directors, commented. However, the real explosion may be experienced with the end of state support. "The war we have to fight now is to prevent long-term wounds."
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