Office Furniture and the Spending Cuts

The UK is buzzing right now about a recently released report concerning the effect the government's spending cuts will have on the economy

. Today, the BBC described that a report unveiled today predicted that the cuts and 20% increase in thr VAT tax will cost the UK roughly 1.6 million jobs across the public and private sector. The unquestionably depressing study was conducted by the Chartered Institute of Personnel and Development .

Several MPs, however, raised doubts. Michael Fallon, a conservative MP, stated he considered the report was rubbish, and brought up that the CIPD has been very incorrect in the past. Granted, Mr Fallon's take on the job forecasts is much easier to swallow, nevertheless, in this case the CIPD may be in the right.

In any introductory macroeconomic course, the connection between the size of the economy and government spending and taxation is explained. Increases in taxation or decreases in spending lower Gdp, because the government is shrinking the amount of money that can be spent. On the other hand, increases in government spending or decreases in taxation stimulate the economy by pumping more money in.

The combination then, of increasing taxation and decreasing spending will definitely reduce the size of the British economy, and businesses and ministries alike will be pressured to lay off staff. The only matter left up for debate is how large the reduction in jobs will be.

The chances are if the debt problem is as major as the coalition says, then the economy will have to make a considerable readjustment. Due to the readjustment that is coming because of the slashes, many workers will lose their jobs until new work opportunities are created in different sectors.

The office furniture industry will need to adapt considerably. There will be a flood of office furniture on the market, because so many individuals are being laid off. One fewer employee necessarily implies one fewer office furniture desk and office furniture chair, and these items will most likely be sold again for cheap.

Furthermore, many freshly out of work workers may turn to working from home to create new income for themselves. A spike in the demand for home office furniture may be on the horizon.

One thing we can be nearly sure of is that office is about to become significantly less expensive. If there ever was a time to buy; it is now.

Office Furniture and the Spending Cuts

By: Greg Jacobs

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