Banks 'must create jobs', says union - as IMF warns labour market is in 'dire straits'

100,000 jobs may have been lost in the financial sector since the beginning of the crisis- but it appears that's just the tip of the iceberg.

by Emma Haslett
Last Updated: 13 Oct 2010
It’s the third anniversary of the run on Northern Rock, and to celebrate, the Unite union has been doing a little maths – and it reckons that 100,000 finance jobs have been lost since the beginning of the crisis. And despite the fact that the financial sector is in recovery, the number of jobs it is creating hasn’t rallied quite so well. The revelation has come mere hours after the International Monetary Fund said America and Europe are facing ‘the worst jobs crisis since the 1930s’. So all in all, not a great news day for the unemployed…

The union has, naturally, been quick to point the blame at the sector itself, saying that now banks have returned to profitability, the onus is on them to provide jobs for the ‘100,000 hardworking UK taxpayers’ who were left out in the cold. National officer Rob MacGregor added that ‘banking spivs’ have caused reforms to be ‘too slow, too timid, and [have] done nothing to change the culture of those at the top of the industry’. Hmm.

On the other hand, it’s worth pointing out that before the crisis, the financial sector was pretty bloated. It’s difficult to disagree that the new, slimmed-down City is more efficient – and probably quite a lot more aware of its own weaknesses than it was before. And let’s not forget that these are bankers we’re talking about – the fewer jobs there are the fewer people the spoils have to be shared amongst, and the larger everyone’s pot. Perhaps this explains why bank bonuses have apparently hit pre-crisis levels again?

Still, at least jobless financiers can take solace in the fact that they’re not the only ones without work: according to a joint report by the IMF and the International Labour Federation (confusingly known as the ILO), a total of 30m jobs have been lost since the beginning of the crisis, leading global unemployment to reach 210m. Apparently, the world is going to have to create 45m jobs a year just to keep afloat.

IMF chief Dominique Strauss-Kahn told a jobs summit in Oslo yesterday that the labour market is in ‘dire straits’. "The Great Recession has left behind a wasteland of unemployment, and this devastation threatens the livelihood, security and dignity of millions of people across the world," he added.

No pressure on George Osborne, then. The Chancellor may have already begun having second thoughts about the extent of the cuts he’s planning to make during his spending review in October. A report released by the Organisation for Economic Co-operation and Development last week warned that attempting to cut budget deficits now could put economic recovery at risk.

For Osborne, who is planning to make the largest cuts for a generation, that won’t exactly be music to his ears…

Find this article useful?

Get more great articles like this in your inbox every lunchtime