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Why Cameron will soon have to eat his words

The PM's claim that employment will rise contradicts leaked Treasury analysis of George Osborne’s Bu

I promised, in my last column, that I would look at developments in the labour market in order to evaluate the coalition government's programme of spending cuts and tax increases. It turns out to be particularly apposite, given that the Prime Minister has since insisted that unemployment will fall each year over this parliament. He will come to regret that promise.

David Cameron based his unlikely claim on figures from the Office for Budget Responsi­bility (OBR), which rushed out a new employment forecast after a leaked Treasury analysis got the government in a bit of a jam. As I suspected it would be, the OBR is no more than the Chancellor's mouthpiece. It is proving as independent as Conservative Central Office, and appears to know as much about labour economics as I do about flower arranging. No wonder Alan Budd announced he will step down as the OBR's chairman after just three months.

The leaked Treasury analysis revealed that George Osborne's Budget will result in the loss of at least half a million jobs in the public sector and 600,000- 700,000 in the private sector by the end of this parliament. This was closely followed by an indication, in a letter to ministers from the Lib Dem Chief Secretary to the Treasury, Danny Alexander, that the job losses could be even greater. Alexander ordered government departments (with the exception of Health and International Development) to identify possible spending cuts of up to 40 per cent. He also asked departments to show how they would cut day-to-day administrative costs, excluding salaries, by 33 per cent at the lower end and 50 per cent at the upper end.

Hard to deliver

The loss of jobs in the private sector is partly the result of much private-sector employment being dependent on spending in the public sector. So cuts in public spending make people in the private sector redundant - or seriously reduce the incomes of, say, consultants, many of whom depend on the public sector for a significant proportion of their work. And yet, the OBR says, employment will grow from now on. Despite the Budget's expected destruction of 1.3 million jobs, the OBR projects that employment will rise by an astonishing 1.2 million between 2010 and 2014. Hence, the private sector is going to create about 2.5 million jobs.

Let's look at why the OBR's forecast is overly optimistic. First, job growth of this kind is unprecedented in the private sector. According to the Office for National Statistics, between the first quarter of 2000 and the first quarter of 2008, when the latest recession began, the private sector created 1.6 million jobs, at a time when the economy was booming.

The table below shows the change in the number of jobs in the public and private sectors between the first quarter of 2000 and the first quarter of 2008, and between the second quarter of 2008 and the end of 2009. Most of the job growth up to 2008 was in financial and business services and construction, along with the public sector. This seems highly unlikely to be repeated over the next five years. (Note that RBS and Lloyds are included in the public-sector estimates from December 2008 onwards.)


The coalition's austerity measures have already hit business confidence, according to the Chartered Institute of Purchasing & Supply's latest services survey. Business expectations dropped to a 15-month low in the single biggest month-on-month fall ever recorded. It is hard to see which industries all of these new private-sector jobs are supposed to come from.

Second, with all G20 members tightening fiscal policy at the same time, it will be "hard to deliver on improving growth for all, or possibly any", as the chief economist at Goldman Sachs, Jim O'Neill, has warned. Adding to that worry, O'Neill notes, is growing evidence that both the US and Chinese economies are slowing.

Third, it is unlikely that people fired from the public sector, such as care assistants, police officers and local authority workers, can simply jump to jobs in the private sector. Occupational differences between any new jobs and jobseekers will be a problem - a skills mismatch.

Fourth, the chances are that most people who lose their jobs in the public sector will live in regions that are heavily dependent on the public sector, such as the north, while any new private-sector jobs are likely to be in different regions, ­especially the south, where access to housing will be a problem - a regional mismatch.

Not constructive

Fifth, many companies have managed to retain staff during the downturn by reducing their hours of work. In any upswing, firms are likely to increase hours rather than create jobs. This will be especially bad for young jobseekers.

Sixth, any increase in jobs will lure back workers from eastern Europe, who left Britain when job opportunities began to disappear. In such circumstances, measured employment will not rise as the OBR expects.

Seventh, there is no intellectual basis for believing that the public sector is crowding out the private sector. In a letter to the Times on 1 January 1938, John Maynard Keynes argued: "Examples abound in all parts of the world where public loan expenditure has improved employment: and I know of no case to the contrary." That seems right. Public spending is keeping many private firms from bankruptcy.

Eighth, plans for building new schools and hospitals are to be scrapped under a review of capital spending, and private-sector construction jobs will fall as a result. Even the CBI thinks these cutbacks are a bad idea.

The downside risks to the OBR's forecast suggest that Cameron's claim of future falls in unemployment is simply not credible. I will be watching the labour market data and will report back regularly. Sadly for the British people, Cameron is going to have to eat his words.

David Blanchflower is a labour economist and a professor at Dartmouth College, New Hampshire, and the University of Stirling.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 12 July 2010 issue of the New Statesman, Behind the mask

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This Ada Lovelace Day, let’s celebrate women in tech while confronting its sexist culture

In an industry where men hold most of the jobs and write most of the code, celebrating women's contributions on one day a year isn't enough. 

Ada Lovelace wrote the world’s first computer program. In the 1840s Charles Babbage, now known as the “father of the computer”, designed (though never built) the “Analytical Engine”, a machine which could accurately and reproducibly calculate the answers to maths problems. While translating an article by an Italian mathematician about the machine, Lovelace included a written algorithm for which would allow the engine to calculate a sequence of Bernoulli numbers.

Around 170 years later, Whitney Wolfe, one of the founders of dating app Tinder, was allegedly forced to resign from the company. According to a lawsuit she later filed against the app and its parent company, she had her co-founder title removed because, the male founders argued, it would look “slutty”, and because “Facebook and Snapchat don’t have girl founders. It just makes it look like Tinder was some accident". (They settled out of court.)

Today, 13 October, is Ada Lovelace day – an international celebration of inspirational women in science, technology, engineering and mathematics (STEM). It’s lucky we have this day of remembrance, because, as Wolfe’s story demonstrates, we also spend a lot of time forgetting and sidelining women in tech. In the wash of pale male founders of the tech giants that rule the industry,we don't often think about the women that shaped its foundations: Judith Estrin, one of the designers of TCP/IP, for example, or Radia Perlman, inventor of the spanning-tree protocol. Both inventions sound complicated, and they are – they’re some of the vital building blocks that allow the internet to function. 

And yet David Streitfield, a Pulitzer-prize winning journalist, someow felt it accurate to write in 2012: “Men invented the internet. And not just any men. Men with pocket protectors. Men who idolised Mr Spock and cried when Steve Jobs died.”

Perhaps we forget about tech's founding women because the needle has swung so far into the other direction. A huge proportion – perhaps even 90 per cent - of the world’s code is written by men. At Google, women fill 17 per cent of technical roles. At Facebook, 15 per cent. Over 90 per cent of the code respositories on Github, an online service used throughout the industry, are owned by men. Yet it's also hard to believe that this erasure of women's role in tech is completely accidental. As Elissa Shevinsky writes in the introduction to a collection of essays on gender in tech, Lean Out: “This myth of the nerdy male founder has been perpetuated by men who found this story favourable."

Does it matter? It’s hard to believe that it doesn’t. Our society is increasingly defined and delineated by code and the things it builds. Small slip-ups, like the lack of a period tracker on the original Apple Watch, or fitness trackers too big for some women’s wrists, gesture to the fact that these technologies are built by male-dominated teams, for a male audience.

In Lean Out, one essay written by a Twitter-based “start-up dinosaur” (don’t ask) explains how dangerous it is to allow one small segment of society to built the future for the rest of us:

If you let someone else build tomorrow, tomorrow will belong to someone else. They will build a better tomorrow for everyone like them… For tomorrow to be for everyone, everyone needs to be the one [sic] that build it.

So where did all the women go? How did we get from a rash of female inventors to a situation where the major female presence at an Apple iPhone launch is a model’s face projected onto a screen and photoshopped into a smile by a male demonstrator? 

Photo: Apple.

The toxic culture of many tech workplaces could be a cause or an effect of the lack of women in the industry, but it certainly can’t make make it easy to stay. Behaviours range from the ignorant - Martha Lane-Fox, founder of, often asked “what happens if you get pregnant?” at investors' meetings - to the much more sinister. An essay in Lean Out by Katy Levinson details her experiences of sexual harassment while working in tech: 

I have had interviewers attempt to solicit sexual favors from me mid-interview and discuss in significant detail precisely what they would like to do. All of these things have happened either in Silicon Valley working in tech, in an educational institution to get me there, or in a technical internship.

Others featured in the book joined in with the low-level sexism and racism  of their male colleagues in order to "fit in" and deflect negative attention. Erica Joy writes that while working in IT at the University of Alaska as the only woman (and only black person) on her team, she laughed at colleagues' "terribly racist and sexist jokes" and "co-opted their negative attitudes”. 

The casual culture and allegedly meritocratic hierarchies of tech companies may actually be encouraging this discriminatory atmosphere. HR and the strict reporting procedures of large corporates at least give those suffering from discrimination a place to go. A casual office environment can discourage reporting or calling out prejudiced humour or remarks. Brook Shelley, a woman who transitioned while working in tech, notes: "No one wants to be the office mother". So instead, you join in and hope for the best. 

And, of course, there's no reason why people working in tech would have fewer issues with discrimination than those in other industries. A childhood spent as a "nerd" can also spawn its own brand of misogyny - Katherine Cross writes in Lean Out that “to many of these men [working in these fields] is all too easy to subconciously confound women who say ‘this is sexist’ with the young girls who said… ‘You’re gross and a creep and I’ll never date you'". During GamerGate, Anita Sarkeesian was often called a "prom queen" by trolls. 

When I spoke to Alexa Clay, entrepreneur and co-author of the Misfit Economy, she confirmed that there's a strange, low-lurking sexism in the start-up economy: “They have all very open and free, but underneath it there's still something really patriarchal.” Start-ups, after all, are a culture which celebrates risk-taking, something which women are societally discouraged from doing. As Clay says, 

“Men are allowed to fail in tech. You have these young guys who these old guys adopt and mentor. If his app doesn’t work, the mentor just shrugs it off. I would not be able ot get away with that, and I think women and minorities aren't allowed to take the same amount of risks, particularly in these communities. If you fail, no one's saying that's fine.

The conclusion of Lean Out, and of women in tech I have spoken to, isn’t that more women, over time, will enter these industries and seamlessly integrate – it’s that tech culture needs to change, or its lack of diversity will become even more severe. Shevinsky writes:

The reason why we don't have more women in tech is not because of a lack of STEM education. It's because too many high profile and influential individuals and subcultures within the tech industry have ignored or outright mistreated women applicants and employees. To be succinct—the problem isn't women, it's tech culture.

Software engineer Kate Heddleston has a wonderful and chilling metaphor about the way we treat women in STEM. Women are, she writes, the “canary in the coal mine”. If one dies, surely you should take that as a sign that the mine is uninhabitable – that there’s something toxic in the air. “Instead, the industry is looking at the canary, wondering why it can’t breathe, saying ‘Lean in, canary, lean in!’. When one canary dies they get a new one because getting more canaries is how you fix the lack of canaries, right? Except the problem is that there isn't enough oxygen in the coal mine, not that there are too few canaries.” We need more women in STEM, and, I’d argue, in tech in particular, but we need to make sure the air is breatheable first. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.