Three blows are likely to hit us in the first months of 2021: Brexit, a new pandemic lockdown, and a new wave of job cuts and closures.
Lockdown pushes down many people who fall through the furlough net, or were looking for new or first jobs.
Back in spring it looked like the biggest job cuts among previously well-established workers would come as lockdown eased. Companies which had stuck it out through lockdown with furlough money and government loans would then shut down or shrink, and those shutdowns would be magnified through their supply chains.
Now we have a second lockdown, and a third must be likely in early 2021. Furlough has been extended, so the official unemployment rate is 4.8% rather than the 10% which had been predicted for end-2020. But closures are accelerating long before lockdowns end. Bosses declared 314,000 redundancies in July-September. That record high number looks likely to be beaten soon, amidst lockdowns.
The immediate blow from Brexit (as distinct from its longer-term harm) now looks like coinciding with a new pandemic peak. The Guardian on 24 November reported on a leaked Cabinet Office paper from September about escalating risks in winter.
The Tories then feared big strikes around now. Unlikely just yet, sadly. They also warned about high flu rates, but so far at least the Northern Hemisphere has had a light 2020 flu season, as the Southern Hemisphere did earlier this year.
Despite the Tories’ public bluster alternately about a smooth deal, or about “no deal” being no worry, their confidential document warned Brexit may “reduce availability of some fresh [food] supplies and push up prices”, and disrupt social care because of its reliance on EU migrant workers. Medical supplies were also tagged as at risk, though the Guardian reports on safeguards installed since then.
The longer-term prospect depends on what happens with the mountain of debt built up in the pandemic.
Companies have taken government loans and paused rent payments (much more than residential tenants have). Governments have borrowed hugely at low interest rates.
Many small businesses and some big ones (airlines, aircraft manufacturers and their suppliers, some big chains of shops) have suffered sharply, but many other capitalists have done well out of the pandemic (think Zoom, think Amazon). Share prices have done eerily well. In Britain and most other countries they dropped sharply just before the March lockdown, but have recovered steadily since. Banks have done less well than in 2019, but are far from crashing. Corporate debt has increased, though the bosses seem confident it will be manageable.
Many less capitalistically-developed countries have debt problems, worse than before the pandemic, though not yet as much worse as looked likely in spring.
Will the whole spiral of debt come crashing down, in the way we saw in 2008? That depends on whether the fading of the pandemic (which we now know will be a slow and painful process, even with vaccines) produces a “recovery boom” as the fading of each wave of the deadly Spanish Flu pandemic of 1918-20 did.
There is no “physical” reason why it shouldn’t. It’s a matter of the specific way that capitalism organises economic life, and the extent to which the labour movement can counterweigh that.
Millions of workers across the world will lose out as the cafés or pubs or shops which employed them shut. But will that impact snowball across industries as in 2008-9 or the early 1980s? Or will those workers be able to find other and maybe better jobs elsewhere? Sharp attempts by governments to rebalance their budgets will produce the snowball effect.
The labour movement needs a programme to cover the range of possibilities:
• Fight cuts, pay freezes, benefit reductions
• Take the big companies making closures and job cuts into public ownership, and convert them to social and green production
• Increase public-service pay, and expand public services rather than cutting them, creating new socially-useful jobs
• Work or retraining on full pay for everyone losing their job or unable to find one on finishing education
• A shorter work week (a standard of 32 hours) with no loss of pay, and new hiring to maintain work levels
• Take the banks into public ownership and under democratic control, to enable democratic control of investment.