A blog for the socially and politically conscious, written by a young, gay activist who strongly believes in equality and justice.

Tuesday, 2 February 2010

Where’s the economic recovery for workers?

Britain’s recession has officially ended—by the narrowest possible statistical margin. The economy grew by just 0.1 percent in the three months to December. It technically ends 18 months of falling output. Yet overall the British economy has shrunk by 6 percent over this time. This is the worst recession since the Second World War. Workers have paid a horrible price for the recent “growth”. Some 2.46 million are unemployed. Many other workers have seen their pay cut or their pension shelved. More are stuck in part-time, low paid jobs because no others are available. One million young people are on the scrapheap before they’ve even had a chance to work. The recession isn’t over for these people. Nor is it over for everyone who will suffer from huge cuts in public services that will have an impact for years to come. Temporary measures like the “car scrappage” scheme lie behind some of the economic growth. These measures have either been withdrawn or will be soon. The other source of growth was government spending, which is set to be sharply reduced. Bosses plan to carry on squeezing workers; they hope that the good times will return for them. Our side needs to fight to make sure we don’t pay for the recession—or the “recovery”.

Shock figures released last week showed how young people have been hit hard by the recession. Nearly half of young black people in Britain are unemployed. This stark figure comes in a new report from the Institute for Public Policy Research (IPPR) think-tank. Its findings undercut the government’s celebration of the first official fall in unemployment for 18 months and its belief that racism is no longer a central cause of “disadvantage”. Two weeks ago communities minister John Denham launched a government report, Tackling Race Inequality. It said, “Socio-economic status and poverty affect people’s chances in life regardless of race or ethnic background.” Poverty and class do indeed affect quality of life – but race adds a very real extra burden. The IPPR report looked at 60,000 households, including 7,200 young people aged between 16 and 24 - this presents the more complex picture. Unemployment for young white people is high, at 20 percent. For Asians the figure rises to 31 percent and for African Caribbeans it reaches a truly staggering 48 percent. The greatest increase in youth unemployment has been among people from mixed ethnic groups. Some 35 percent were unemployed in November last year – up from 21 percent in March 2008.

Racism is embedded in every part of society. In schools, black children are more likely to be excluded and marginalised. Sometimes discrimination is less subtle – as a recent Department for Work and Pensions survey found. It sent out almost identical job applications to a wide range of companies. Some had names suggesting the applicant was from an ethnic minority, rather than white British. Those applicants who were perceived to be white received a positive response after nine applications. Yet ethnic minority candidates had to send 16 applications before receiving a positive response. All of this makes it hard to believe the government’s claim that racism is now peripheral. It is also wrong to use the fall in official unemployment figures to claim that the recession is over. There are still 2.46 million out of work and this is likely to rise. The number of people working part-time jumped by nearly 100,000 in the three months to November, while the number of full-time jobs fell by 113,000 over the same period. The number of workers who say they have been forced to take a part-time position after failing to find anything full-time was close to 1.3 million, a rise of almost 40 per cent on the same period last year. Some 46 percent of young women with no qualifications are unemployed. Some employers have sacked fewer staff because they (and some union leaders) have convinced workers to take pay cuts or work shorter hours.
The official figures admitted last week that unemployment is rising. The count which the government prefers (the number of people claiming benefit) rose to hundreds of thousands. Every other indicator has been showing a rise in unemployment for months. The International Labour Organisations measure (which counts some of the jobless who cannot receive benefit) now stands at 1,510,000-a rise of 28,000 on the month. More job losses are coming. Alcoa announced this week that it is cutting 6,500 jobs in the US and Europe. Jobs went last week at Longannet (Scotland's last deep-mine pit), BP (1,000 at Grangemouth), Energis and many more. Marconi and British Airways are considering slashing more jobs. Already this year 123,000 manufacturing jobs have gone. They tend to be long term, relatively well paid employment. Many of the jobs created are poorly paid, part time and easily dispensed with by employers. It is not much consolation to an engineering worker on perhaps £9 an hour to know that they can apply for a job at B&Q on £4.20 an hour. Digby Jones, director general of the bosses' CBI, is clear that the people he represents will try to pass on the pain of recession to workers. "Firms are bracing themselves for a cold economic winter," he said last week. "There are more job losses to come, particularly in manufacturing and tourism."

Longer term trends are far more devastating than a single month's figures. Internationally the recession is gathering pace. The International Monetary Fund has sharply reduced its forecast for global growth to just 2.4 percent for this year and next. Anything less than 2.5 percent generally signals a recession. Right up to last month the IMF was predicting a rise of 3.2 percent for next year. The jobless total in the US has soared to an 18 year high. Japan is on the brink of catastrophe. As leading commentator Martin Wolf wrote last week, "If the world's second largest economy fails to stop falling prices and to increase demand it will descend into a deflationary spiral. "That could force it to default on its debt." The recession as always will hit Third World and developing economies hardest - and the British government is responding to all this by fiddling the unemployment figures and making even more concessions to the bosses. Millions of people who would like to get a job have been driven from the unemployment statistics. Many of them have been moved into the column marked "economically inactive", people who do not sign on as unemployed because they know they will not receive benefits. In just the last three months the number of "inactive" working age women rose by 100,000. The groups where female inactivity is growing most quickly are not older workers but those aged 16 to 24 and 35 to 49. Half of men over 50 are not in paid work. They have perhaps 25 years of life left but in many cases no prospect of work and no chance of getting benefits.

So they exist in a twilight world where they do not even show up on official jobless statistics. As the authors of a major new book, The State of Working Britain, write, "There are now nearly five working age inactive people to every unemployed person." Those people the education system has failed are suffering particularly hard. Even in the allegedly boom years for employment from 1993 to 2000, employment fell among unqualified workers in areas such as Tyne and Wear, and Merseyside. Employment in these regions fell by 3.9 percent for men, for women it fell by 6.9 percent. Others are shunted off unemployment when they are put on long term sickness benefit. This removes them from the figures but also subjects them to a terrifying regime of threats and suggestions that they are scrounging. The government is much softer towards business. Gordon Brown has reminded his fat cat audience of plans to cut capital gains tax from 40 percent to 10 percent in April for investments held for two years. Amid the devastation from the recession the voice of resistance needs to be heard much more strongly. Words from the union leaders are not enough. They should stop bowing to New Labour and start fighting for every job through a socialist alternative.

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