The FT has an article this morning that suggests that there will be at least 5 million people unemployed in the UK once the furlough scheme comes to an end in October.
As the article puts it, when quoting James Reed, chairman of recruitment firm Reed and co-founder of Keep Britain Working, a campaign to reskill workers whose jobs are at risk:
At this moment a ‘day of reckoning' for jobs when furlough comes to an end is a danger. When this happens the country will be highly vulnerable to unemployment rising to five million people or 15 per cent of the workforce. These would be levels not seen since the Great Depression of the 1930s – a harrowing thought.
I do not dispute this logic, or the conclusion, but I do think that the estimate of the number of people unemployed is wrong. I very strongly suspect that Mr Reed has not taken the number of self-employed people who will now be unemployed into account when coming to his total, and as a result I think that the real number will be closer to 7 million, then 5 million, and the total might exceed 20% of the workforce.
The scale of the economic crisis about to hit us is almost unimaginable, and if the government believes that it will face a shortage of cash when tackling it then the consequences will be of any recognisable scale.
There is a moment for any idea. This is that moment for modern monetary theory. An understanding of it is going to be vital to the survival of our society, and that of many others.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
A recent scenario exercise in a company with which I am involved looked at the inter-relationship between demand destruction, logistic disruption, public unrest (the Floyd effect), payment delays through cash flow problems with key customers, component shortages, and tariff impacts post Brexit. has meant a base line forecast of 45% redundancy in the UK. Fortunately it has a thriving German subsidiary. This I think is the lesson – worst case planning and move what you can.
“Keep Britain Working, a campaign to reskill workers “…a worthy campaign but which begs the question “re-skill using what education resources” – since to re-skill means education and training & the resources to do this – educational institutions, have been eroded over 40 years by tory & tory-lite “governments” (I use the term losely). I agree that MMT can make money available (for amongst other things E&T) but the capacity for E&T takes time to build and I am unconvinced that it exists at a scale to match need. (but am more than happy to be convinced that it does exist). There could also be much more “localisation” of the sort undertaken by Preston Council (sourcing services etc from local suppliers). But this goes against the trend of de-funding L.As and centralisation. Apologies for the pessistic note & the rather wandering focus of the comment.; “here is a moment for any idea”… localisation?
I share your concern
We very clearly do not have the skills to re-educate people in what they need
But we can work to have them
And yes, relocalisation has to be part of any agenda
My biggest worry is that austerity will come back into a play. I’m sure it will. The Government will panic and cut off the very thing that the economy needs – money. It’s own stupid ideology will cage its possibiities and potential. No doubt they will cut taxes too.
It does not look good.
You are right
That is what it will do
The true horror for me is that none of this is nescessary, it’s a choice.
If I understand it correcty, our society has suffcient resources at its disposal to make sure no one suffers terribly any lack of vital goods, services or accomodaton. The coming catastrophe is a choice made by those in positions of authority and supported by a population bamboozled by resentment towards others lest they get something they don’t “deserve”.
You are right
This will be a choice
I deplore your negativity. 7 million unemployed? No – 7 million to work in the fields picking fruit and vegetables, and as nurses and brain surgeons and ward cleaners in the NHS, and in new booming industries and sevices exporting Scotch Whiskey and thatched cottages to the USA after a fantastic and amazing trade deal is made thanks to the hard work and energy of Messrs Trump and Johnson and Raab and Gove and Cummings. Why, in our village here in the sunlit uplands of Buckinghamshire, I know of one farmer already making plans to establish a breeding herd of unicorns and create links with firms over there in Poughkeepsie and other metropolises. Your trouble is you lack the vision thing and have no faith in this great wonderful amazing world beating country of ours that stood alone and won the war back in the last century.
🙂
It seems increasingly likely that Trump will lose. Johnson will lose the support the rabid Republicans. I wonder how that will affect the Tories?
Biden is one of the least inspiring candidates for a long time but Might Biden -who would be a liberal Conservative over here -be pushed to embrace MMT, if only by necessity?
There may be hope.
Whilst your projection of unemployment is alarming people without jobs should surely be viewed as a resource.
As climate action is required is it such a stretch for “status quo” thinkers, deprived of their markets, to realise that retraining to deliver the changes necessary – by utilising green-pound funded initiatives – is the way forward; to solve unemployment and climate change and without bankrupting their precious currency.
This will have to happen Bob