Every silver lining has a cloud

In economics, there's nothing fully good.

From the department of counterintuitive findings come two findings showing the downsides of good news.

First up, the Washington Post reports on a new explanation for why it is that people start to die when the economy gets better. For every percentage point decrease in the unemployment rate, there is a 0.004 per cent increase in the number of deaths (a low, but statistically significant amount), which corresponds to about 6,700 dead people.

Suzy Khimm writes:

In a new paper, researchers argue that economic boom times create a scarcity of caregivers in nursing homes, raising the mortality rate through a disproportionately high numbers of deaths among the elderly.

The Center for Retirement Research explains that a strong job market creates “greater scarcity in front-line caregivers in nursing homes, which may cause more deaths among the elderly.” When the overall unemployment rate goes down, for instance, employment declines are particularly noticeable among certified aides and nurses in these facilities.

Meanwhile, in Investors Chronicle, Chris Dillow addresses the upside of a downside (so to speak).

Since 2007, labour productivity has fallen in the UK, meaning that the one hour of work now produces less output than it did five years ago – 3.4 per cent less, to be specific. This is pretty bad news. Historically, a lot of growth has come from population growth. A more populous country can make more stuff than a smaller one, after all. But now that much of the west appears to have a stable population, we need productivity to grow if we are to have any growth at all. If we can't have more people making stuff, we need to have each person making more stuff.

But this prductivity slump isn't entirely bad news:

If the relationship between GDP and employment in the last four years had been the same as it was in the previous 20, there would now (mathematically speaking) be 3.1 million fewer people in work. If all these had registered as unemployed, there'd be 5.8 million out of work - an unemployment rate of 18.2 per cent. Imagine the political effects of that.

On his personal blog, Dillow elaborates:

You might think that the very fact that workers are more productive in this alternative universe would cause firms to hire more of them. But things aren’t so simple. Firms only hire if they anticipate sufficient demand for the additional output. And where would this demand come from? The tendency for higher unemploymentwould depress consumer spending. On the other hand, it’s likely that business investment would be higher - not least because a world of growing productivity is a world in which there are more investment opportunities and easier access to finance.  But as business investment is only 8.3% of GDP, it’s unlikely that it would be so much higher as to create three million jobs.

Sometimes, good news can be bad news, and bad news can be good.

We may not be getting more productive, but there's an upside to that. (Getty)

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.