Will this be a jobless recovery?

6 10 2009


AUAFSC9CA3B1FKFCA8XU5EPCA777ZTDCAR59Y2VCASIJMODCALGU5QUCAMXXSGBCAB6JSZRCA8KMPKXCARPYO9JCA653CVZCA0PX1P5CAW6HNUCCAVKPXI4CA0ILQW3CA370OV9CA9IHIE3CA7MSGYCCAVC85EWBetween 1999 and 2007 manufacturing jobs in the UK fell from 4.5m to 3.3m. In the same period jobs in the financial and business services sector grew from 5.3m to 6.5 m, and jobs in the public sector grew from 8.4m to 9.9 m. The Financial Times claims that around two thirds of jobs created since 1998 have been in the public sector. Most strikingly, within that figure, of the 1.07 m jobs created in the public sector,963,000 were taken by women in health, education, social care and social administration. There are at least 10 areas of the UK, all outside London, where 40% or more of those working are in the public sector. 1

There is good reason to fear that whatever the eventual shape of the UK recovery it will not bring with it many new jobs. As a result we may have to live with a much higher level of structural unemployment than has been the case for the past ten years. The two main areas of job growth in the UK in the past ten years were across the public sector, particularly in welfare and education, and in financial and business services. None of these sectors is likely to play the same role in the next ten years, if for different reasons.

The public sector now looks as if it will be, if not necessarily cut back as severely as the bloodthirsty rhetoric might suggest, then at least contained. Financial and business services may stabilise but are unlikely to regain the dynamic growth of the boom years.

Neither is the long term decline in manufacturing jobs likely to be reversed. The UK’s role in manufacturing is predominantly in areas of high productivity with high skill levels. Even with more investment and more support and encouragement from government, which would be very welcome,  manufacturing is unlikely to add a huge amount of new jobs.

Both the Tories and Labour are proposing ways of trying to reduce unemployment, but these are mainly on the supply side, through for example attempts to get people off of sickness benefit. Forcing people back to work only makes sense if jobs are available for them to do, and at decent wages. The main effect otherwise is the traditional role of the unemployed as the reserve army of labour which helps to force down the wages of those in work.

The proposed extension of the retirement age to 66, although welcome for other reasons, will also have the effect in the medium term of adding to the ranks of the unemployed, particularly the young.

Unemployment is now nearing 8% of the adult population of working age. It is estimated that it will reach at least 3 million by next year. With benefits also likely to be squeezed this means misery for millions. This is the reality of the austerity plans both parties have in store for us.  Far more discussion is needed  about what kind of economy the UK could have which could gainfully employ the unemployed.







1 https://postrecession.files.wordpress.com/2009/01/whitepaper6.pdf



Sharing out the misery

22 04 2009

A recent study by Keep Britain Working has found that many workers have responded to the threat of job cuts by proposing that their own pay and benefits should be cut in order to save the jobs of others.  While I have no idea how sound the methodology of this survey is it does chime with anecdotal evidence.  How can we understand this apparently altruistic response, for which one struggles to think of a historical precedent?

There is a positive element of solidarity in not wanting to see your colleagues lose their jobs.  Perhaps there is even the fear that if you accept the redundancies of others then you may well be next.  However, whilst in previous recessions there has been a similar and quite strong tendency to fight for the defence of jobs, in the past people simultaneously fought to defend wages.  One need only go back to the UK Miners’ Strike in the early 80s to see that.  During this period, workers tended to focus on forcing employers to not make redundancies, cut pay or close businesses.  It would seem then that the virtual elimination of organised labour as an effective force in society today plays a significant role in fuelling a widespread mood of acceptance that cuts have to be made somewhere for us all to survive.

The prevailing popular reaction to the recession in the UK has been passive acceptance with underlying anger, where the anger has been directed mainly at bankers or foreign workers.  Very little active hostility or organised resistance has been directed at the government or at employers.  This recession is increasingly being seen as the product of greed in the City and perhaps also greed in general.  In light of that, we can see how the willingness to take cuts in living standards is the flip side of this diagnosis, in the sense that people now feel that a period of austerity is a necessary antidote to the age of greed.

The unwillingness of people to fight for what is in their best interests, which for many of us means the maintenance or improvement of living standards, shows how low our self-expectations have become.  Current discussion about the public sector and possible cuts in public spending will now take place within this milieu of virtuous and necessary austerity and prudence, in no small part influenced by our modern-day preoccupations with what is good for the environment. 

Perhaps it is time to focus our efforts elsewhere and create a different agenda which puts development and growth at the centre of our discussions on the recession, the economy and the future.  Let us put our time to better use and quit trying to work out how best to share out the misery.

Capitalism, anti-capitalism and the G20

30 03 2009

The fault line in politics today is not between capitalism and anti-capitalism. It is between those who favour economic growth and those who are opposed to it. The ‘anticapitalists’ who will be protesting this week against the G20 do not have any kind of coherent alternative to capitalism. They are only anti it in the sense that there are aspects of capitalist society that they do not like very much. What they do have in common is an opposition to economic growth. 

Marx’s critique of capitalist society was profound and all embracing, but it had at its heart a central belief that capitalism needed to be superceded because it could not consistently develop the means of production globally. It was prone to economic breakdown and even war. This analysis has proved to be correct over the past century and is true today. The current recession is a product of the declining productivity of the economies of the west and the tensions between global powers. But Marx never rejected the economic growth that capitalism can bring.  He understood that freedom from want was the basis of civilisation and that remains true today.

If it were just a ragbag of anti-capitalist who held these anti-growth views that would not be a problem. However the sentiments they espouse are  shared by large sections of society. There are people who back the anti-capitalist demos who believe that we need a permanent recession to combat global warming.  This may seem extreme but it is now commonplace to hear people argue that we have too much and need to cut back.

One consequence of the recession in the UK is that we face austerity in the years to come. Public services will have to be cut and living standards will decline. Our response to this should not be to rationalise it by saying it is good for the planet or good for our souls. It should be to look for more ways to invest and innovate in order to find solutions to the technical,  environmental and social challenges we have to face.