Over at the Adam Smith Institute in London, they take a look at what's driving unemployment there and why the outlook is grim in 2012. 

Last week’s joblessness figures were hardly encouraging. The Chartered Institute of Personnel and Development predicts a gloomy forecast for employment prospects, forecasting unemployment to reach 2.85 million by the end of 2012. Their Labour Market Outlook makes for very miserable reading for those seeking jobs. Similarly, research from the TUC suggests that ‘unemployment’ may be at around 6 million if those in temporary work or underemployed are taken into account. The TUC has applied the US U1-U6 system of measuring unemployment.

Of course, we should take the TUC’s research with a good pinch of salt. The TUC has taken the broadest possible measure of unemployment, naturally, as it wishes to criticise government policy. The TUC does not give a great deal of detail about the source data it used – it simply states that they are derived from the ONS, so it is not easy to critique its methodology, aside from the general criticisms that must be attached to the US system. These figures do not allow for revealed preference; individuals may state that they are willing to work full time but actually may not to do so if a full-time job were available. If nothing else, the TUC’s presentation is misleading as the US figures expressly contain six different types of ‘unemployment’, so to pick one (U6) and present it as definitive is disingenuous in itself. 

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