With increased consumption by Londoners and tourism heavily on the rise, the Olympics managed to pull the country out of recession as well as provide incentives for the British people to help nurture the economy past the effects of the financial crisis. The stimulated investment from domestic industry, overseas contractors for design, management and service (as previously mentioned with the Winter 2014 Olympics), has helped the country ease back into controlled growth. This has been backed up with statistical analysis of GDP as well as employment figures increasing between 2008 to 2013. There has been an increase of 950,000 people in industry between 2012 and 2014, suggesting increased proportion of labour force becoming employed. The labour force is defined as the sum of employed and unemployed people. Unemployed people are defined as those who are actively seeking work and have been doing so for four or more weeks.
However, there is evidence to argue otherwise as unemployment rates have actually risen slightly between the 5 year gap. This may be due to increased migrants in the country and other factors but as long as the labour force is increasing and there is evidence to suggest growth in the UK, a blind eye may be turned to the unemployment rate for the time being, although it is important for it to be acknowledged.
The figures researched from the Office for National Statistics (ONS) can also be backed by the Chancellor of the Exchequer, George Osborne, as he can be quoted that although there is still a long way to go but the figures help cement the fact the UK is “on the right tracks” to sustainable growth again. The Olympics not only helped pull the country from recession but have stimulated jobs which is crucial in recovery. Using the ONS, the economy had contracted by 6.4% between early 2008 and the middle of 2009, but since have recovered about half of that lost output.
The longer lasting impacts of the Olympics and trade effects
Papers discovered during my research included “The Olympic Effect,” published 2009, (NATIONAL BUREAU OF ECONOMIC RESEARCH) using this, it helps form a basic understanding of why longer lasting impression of the Olympics may actually create a toll on welfare and national budget. Economists are fairly sceptical on the public provision of infrastructure for sporting events, such as the Velodrome or Aquatic centre provided through government funding and the London Organising Committee of the Olympic and Paralympic Games (LOCOG). The main worry of such spectacular buildings is the neglect and infrequent use, post-games and eventually it becomes a burden on the taxpayer as a result of continuous regulation.
Examples of neglect and abandonment include the 2004 Athens Olympics, in which many of the venues lie vacant and rotting and independent media outlet reporting that up to 21 out of the 22 newly constructed sites are still unused. Additionally, with estimated losses as of up to $14.5billion (USD), the 2004 Olympics are cited to be a contributor to the Greek government debt problem. Although papers presented to the Greek Minister of Finance, Mr. Giannis Stournaras in 2013, it is argued that the overall net economic benefit of the games for Greece was positive. This further highlights the problem was not during, but after the Games due to vacancy of the mega stadiums.
Image credits: businessinsider.com
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