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What recession means for us

December 14, 2008

recession_0[1]An analysis of the likely impact of the coming recession on workers’ lives and a rallying call for collective action to mitigate that impact.

The recession is here. We’re told to tighten our belts and brace ourselves for redundancies, wage and service cuts. Politicians and business leaders are united in saying we should pay for a crisis not of our making. A recession is simply when the economy shrinks for 6 months in a row. What this means for individual firms is a squeeze on profits, and we can be certain that unless we do anything about it, that’s going to mean a squeeze on us, as our employers try to protect those profits.

Even public sector workers will feel the squeeze as the government tries to recover the billions already spent on bailing out the banking system, and to make ‘efficiency savings’ in the face of falling tax revenues. But wait, isn’t Gordon Brown going to make the rich pay with higher taxes? You’d certainly think so from the press. The Times, on its front page no less, even pictured Brown waving the red flag of communism. Alas, reality is rather different.

The Financial Times reassured its affluent readership with a more honest take on matters. Of £104bn worth of clawbacks the government is expected to make, just £2bn is expected to come from taxing the rich. That’s less than 2 percent of the total, and even that doesn’t take into account that the rich will try and pass on their burden by increasing their incomes at the expense of our wages. It’s also quietly forgotten that the top rate of income tax is still nearly 20 percent lower than under Margaret Thatcher’s pro-rich government.

A further £18bn is planned to come from regressive taxes. These are taxes that affect you more the less you earn. No trouble for the rich here. The rest is scheduled to come from public service cuts and wildly optimistic forecasts for a rapid economic recovery – when the recession has only just officially started! [Jan 09] So behind the headlines the plan is clear; they want to make us pay for their crisis. So how is the recession going to affect us?

One way in which the cost of the crisis is passed onto us is through redundancies. Unemployment is predicted to increase to as much as 3m in the next couple of years. This means over a million people will lose their jobs. Already the news is full of layoffs, and it’s set to get worse. Obviously redundancy hits those laid off in the pocket. This is especially the case if they’re agency staff or haven’t been in the job long, which means they don’t get much, if any, redundancy pay. But redundancies also hit those ‘lucky’ enough to keep their jobs as they have to work harder to make up.

Not content with mass layoffs, just when the economy is proving incapable of keeping people in work, the government is planning to cut benefits bills by punishing unemployed people for not finding jobs! A recent report recommended that unemployed workers should be made to either look for work or do community service “from 9 to 5” in order to earn their £60 dole money. That works out at £1.50 an hour! A whole host of other attacks are planned, such as forcing single parents with children over the age of one and many people currently signed off sick to look for work or have their benefits stopped. Of course, the whole point of a recession is there’s not many jobs to look for.

Wage cuts
Those of us who keep our jobs can’t expect to escape the punishment. Wages will be attacked directly; workers at JCB factories recently voted to take a £50 a week pay cut to avoid redundancies. The company then made some more redundancies anyway. This kind of ‘between rock and a hard place’ offer is likely to become more common with workers nervous about losing their jobs; althought the JCB example makes it clear that bosses can’t be trusted. But wages can be cut in less visible ways too. If workers can be made to work harder and faster, or longer days or through their breaks, we end up doing more work for the same pay. This will often be making up for the work of colleagues made redundant, saving the boss cash. Whenever your boss asks you to “give 110 percent for the team,” this is what they have in mind. Of course we pay the price in stress and burnout, but at least we’ve got a job, right?

Public service cuts
A further £35bn of the government clawbacks are scheduled to come from public sector spending cuts. This will mean cuts to public services and further attacks on public sector workers pay and conditions. Front-line services are expected to be hit, so alongside the attacks on unemployment benefit, the health service is expected to be hit particularly hard alongside cutbacks to schools, social housing, energy efficiency programmes, GP surgeries and flood defences. Of course if you can afford private healthcare and to move out of flood-risk areas, this probably won’t bother you. For the rest of us it’s bad news.

Repossessions and evictions
Another way the recession will hit us is through a rise in home repossessions and evictions as people fall behind on mortgage repayments and rent. Repossessions are already at record levels, and set to rise further. The government is encouraging banks, including those it now owns, to go easy on repossessions, effectively tolerating squatting. No doubt they’re conscious that chucking families out on the street is not likely to be popular. But they’re in a bind. If they don’t repossess people, why should anyone pay their mortgages at all? If the government steps in to nationalise the homes of mortgage defaulters as has been suggested, this just raises the amount they have to claw back through the other means discussed above. The absurdity is we could see people being chucked out on the street while houses stand empty and can’t be sold.

So is it all doom and gloom?
It doesn’t have to be! If we’re honest, we’re not in a very strong position and we’re likely to take the brunt of this crisis unless we set about changing that. There are various things we can do, ranging from simple things you’re probably doing already to daring acts of collective action to win the things we need. So…

Talk to your workmates – on your breaks or in the pub after work. We’re all in the same boat, just realising this is a step towards doing something about it. When you realise your problems aren’t personal but social, all sorts of possibilities for mutual aid open up. Beware bosses claiming they’re in the same boat too; who do you think they’d throw overboard first?

Network with other workers – in your area or sector. Do you have friends or friends-of-friends working locally in the same sector as you? Consider going for a coffee or a pint to swap experiences and find out if there’s anything you can learn from each other, or ways to help each other out (like handing out leaflets at each others workplaces so the boss can’t victimise you).

Consider collective action. Collective action covers a whole range of things, but the principle is that while on our own we are weak, when we act together we can achieve more than the sum of our parts. Examples include going in a group to the manager’s office to support colleagues being made redundant or pressured into working longer or harder. There’s safety in numbers. Or deciding with your workmates to ‘work-to-contract’ – taking your breaks and leaving on time in response to pressure to do more work. It’s easier to say no to the boss when you know your workmates are doing the same.

More dramatically, things like occupations can win major concessions. When workers were laid off at a factory in Northern Ireland recently they occupied the plant for 48 hours demanding improved redundancy terms. They won. By acting together they turned the tables on the bosses, who expected them to go home alone and ‘think things over.’ Instead they showed the inevitable wasn’t so inevitable. It isn’t always easy to take collective action, but it starts from realising what we have in common with other workers, and what we don’t have in common with the politicians and bosses trying to shift the costs of the crisis onto us. We can’t fight back on our own, but together we have a chance.

Written for the Tea Break bulletin in December 2008.

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