Vol. 75/No. 41      November 14, 2011

Meanwhile, living standards are falling at a rate unparalleled since the 1920s. Workers with the lowest incomes are being hit the hardest. Real wages have declined over the last six years, with prices rising twice as fast as wages, according to official figures.

“We got a 1.5 percent rise this year, about 1 percent after tax,” said Samuel Kargbo, a worker at Allied Bakeries in east London. “Prices are rising at over 5 percent. Enough said.”

Every indication is that the decline of jobs and living standards will continue, affecting millions of working people. Three and a half years after the 2007-2008 recession, gross domestic product remains more than 4 percent below the prerecession peak. The so-called recovery is slower than during the recession of the early 1930s.

The National Institute of Economic and Social Research pointed out that the “recovery” is “the weakest of any since the end of the First World War.” Manufacturing output is actually declining overall.

With profits squeezed over a long period, business confidence is low, and companies shy away from borrowing to invest in capacity-expanding plants and equipment. Bank lending continues to decline. Government figures now reveal that the 2007-2008 recession was deeper than originally calculated: the GDP decline was more than 7 percent.

A quarter of a million public sector jobs have already been axed. This will rise by hundreds of thousands in the next four years, according to the Chartered Institute of Personnel and Development. A government pledge that cuts in public sector jobs would be compensated for by a growth in the private sector has proven to be false. Women have been disproportionately hit by public sector job cuts, and unemployment among women is rising particularly fast.

More than half of Britain’s trade is with the European Union, making it quite vulnerable to the so-called sovereign debt and banking crisis in Europe—itself rooted in a longer term crisis of production.
 
 
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