Urgent action needed on soaring unemployment


” To avert the worst of the jobs crisis, we need an urgent extension of the furlough scheme & real investment in green industries.”

Zarah Sultana MP

By the Labour Assembly Against Austerity Team

Wednesday’s economy statistics have confirmed the fight to prevent soaring unemployment is paramount as we learnt the UK is in recession for the first time since the aftermath of the 2008 financial crash. The numbers show the UK’s economic activity has collapsed, down 20.4% in the second quarter of the year, from April to June

What these numbers reflect are that as a result of the covid pandemic and sectors of the economy shutting down, we were producing less, spending less, and – as we are now already seeing – jobs have been put at risk without public intervention to safeguard employment.

Between April and June, some sectors, like hospitality, saw almost a 90% contraction as hotels, pubs and restaurants were shutdown. At the same time the construction and education sectors shrank by 35%.

The economic news comes on top of jobs news released the day before that showed 730,000 fewer people – nearly three-quarters of a million – were lost from payrolls from March to June. 220,000 jobs were lost over the quarter and the number of people now on zero-hours contracts has risen to over a million. Worryingly, the number of vacancies has also crashed and is below even the average during the 2009 financial crisis.

This is historically bad – it is the largest ever quarterly fall on record and the UK is in the largest recession on record. 
And we are doing worse than other similar economies – France, Italy, Germany, South Korea and the US. They all suffered shrinking economies, but none as bad as the UK.

With a recession and significant job losses already in place now, worse is to come, once the pandemic economic interventions such as the furlough job retention scheme are wound up. 

The government is closing it because it prioritises profit over people and is using the end of the furlough to force people back to work. Doing that without a vaccine, without a sufficient test and trace system, and without the financial support for those that need it, and without the public confidence in the government, means many jobs will go if left to the market.

The end of the furlough scheme in October, which is already being wound up, comes against advice from trade unions and Labour politicians. 

They can see that real lives are at stake as jobs disappear and the safety net of local public services and social security is not sufficient to meet the scale of the crisis. Labour’s Shadow Treasury Minister, Dan Carden, said, “The Government was too slow into lockdown, too slow on testing, too slow to protect jobs and livelihoods. The failure to recognise the scale of the crisis has given us the worst of all worlds: the worst excess death rate in Europe and on course for the worst recession too.”

Former Labour leader Jeremy Corbyn, said the government needs to take urgent action to prevent mass unemployment, which should include, “urgently investing in the jobs we need for the future, including in green industries, social care and across the public sector.

Newcomer MP Zarah Sultana said, that to “avert the worst of the jobs crisis, we need an urgent extension of the furlough scheme & real investment in green industries.”

In response, the TUC has demanded government, “extend the job retention scheme for businesses with a viable future who can’t operate because of virus restrictions; invest in the jobs we need for the future in green industries, social care and across the public sector; and they must ensure a decent safety net is in place to help those who lose their jobs get back on their feet.”

The Labour Assembly Against Austerity urges people to get active in their workplace trades unions and fight for every job that they can, also to get involved in their local Labour parties and make the case for public intervention into the economy to protect people from the profit agenda that will see jobs cut and livelihoods cut, and crucially to support the Peoples Assembly Against Austerity and all campaigns for investment in our jobs and communities.

We must eradicate financial insecurity through a minimum earnings guarantee at a decent level, ensure Statutory Sick Pay at living wage levels, support for renters, and build a Social Security System that is universal and not punitive. The crisis has also shown we need trade unions more than ever. Greater union rights and freedoms will help end the exploitative zero-hour and precarious contracts that dominate our economy, save jobs and give workers a proper say in their workplace.

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