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The New Deal is a new policy that the government implemented in 1998 in an attempt to reduce the levels of unemployment. It aimed to do that by increasing the skill levels of the workforce. It aimed to do this by providing intensive help about looking for work. This is available to those who have been on Job Seekers Allowance (JSA) for more than 6 months. The worker then either goes into full time education, a work placement or self employment.New Deal Success - read more here.
By giving the workers these new skills it allows them more mobility within the labour market and will reduce the effect of structural unemployment. This should boost make the economy more productive and so it has done for the first years of its introduction with 100,000 more workers employed. And in 1998 it is claimed to have put 40% of those younger unemployed workers into employment. Despite this it is costing the government £1000 to get each worker into that job. In 2000 Blair announced that the scheme had been successful in getting 250,000 young workers into a job and pledged £3.5 million.
Can Labour claim New Deal success?
"The New Deal is a promise made and it is now a promise kept" - Tony Blair
"The New Deal has cost the nation as much as the Millennium Dome" - Graham Brady
Read the full article here.
"The New Deal is a promise made and it is now a promise kept" - Tony Blair
"The New Deal has cost the nation as much as the Millennium Dome" - Graham Brady
Read the full article here.
Market or Government Failure?
This government intervention has corrected the market failure of unemployment and with more people in jobs aims to increase the consumption level within the economy and thus affecting the Aggregate Demand curve.
In more recent times the unemployment rate has once again soared. From August to October in 2008 more than 180,000 people have been made redundant. With this large raise being twinned with normally large sectors cutting back on workers it leaves a hole in the job market. There are too many people and too few jobs.
Gordon Brown has been quoted in saying that he will be able to ‘create 100,000 jobs’ and although this will have some impact it is unlikely to make a large enough impact in the 2million workers unemployed, a figure that rises on a daily basis. It is expected to reach 3 million by 2010.
This government intervention has corrected the market failure of unemployment and with more people in jobs aims to increase the consumption level within the economy and thus affecting the Aggregate Demand curve.
In more recent times the unemployment rate has once again soared. From August to October in 2008 more than 180,000 people have been made redundant. With this large raise being twinned with normally large sectors cutting back on workers it leaves a hole in the job market. There are too many people and too few jobs.
Gordon Brown has been quoted in saying that he will be able to ‘create 100,000 jobs’ and although this will have some impact it is unlikely to make a large enough impact in the 2million workers unemployed, a figure that rises on a daily basis. It is expected to reach 3 million by 2010.
The scheme was originally designed for dealing with unemployment in a growing market. Thus it could be suggested that the scheme is out dated. More innovative ways are therefore needed to stem the level of unemployment as the market is contracting rather than expanding.
Thus, can one can argue that "High unemployment is here to stay?"
You will need to be able to evaluate to what extent the New Deal, as a government policy, improved the competitiveness of the labour market.
Exam Questions
TBC
-JBB-
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