Yesterday was awash with economic data, a deluge of catastrophe interspersed with little nuggets of success and hope. Today, I am going to try and make some sense of it.
Firstly, the UK unemployment rate grew to 4.5% in the three months to August, compared with 4.1% in the previous quarter. This was driven by a fall in male self-employment, with young people, part-time workers (and ballet dancers named Fatima) disproportionately impacted.
At the same time, redundancies rose to their highest level since 2009, the biggest jump since such statistics were first published in 1995, according to the Office for National Statistics. Economists are predicting more job losses where that came from, as stronger Covid-19 restrictions come into force while the government’s support for workers weakens.
Still, alongside this steady stream of negativity is news of people returning to work following the economic upswing over the summer. The ONS recorded a strong quarterly increase in vacancies, driven by small, flexible businesses. Plus, the number of employees on companies’ payrolls rose by 0.1%, or 20,000 people, between August and September, although it is still 629,000 lower than a year earlier. The general feeling is that it could have been a lot worse, and that government support has helped, at least for now.
Meanwhile, the International Monetary Fund said that the global economy will shrink by 4.4% this year — which is a lot, but not quite as much as the 5.2% decline forecast in June.
This is likely buoyed by accelerating economic recovery in countries like China and South Korea, which are seeing strong export sales and declining cases of coronavirus. China is set to grow by 1.9% this year, far exceeding expectations, and the total value of China’s stock market has this morning climbed to a record high of more than $10tn.
But just as manufacturing-heavy economies, such as China, are steaming ahead, so too are those dependent on oil or service industries floundering. Just as big firms and agile tech start-ups are innovating and adapting, so too have many restaurant, cinema and gallery owners pulled down the shutters for the last time. And just as the world’s billionaires have grown their fortunes by £7.8tn during this pandemic and increased their market share, so too are part-time, unstable workers facing a winter of unemployment.
You see, if you take a step back from the sheer volume of information, it becomes clear that our economic recovery will be one of two halves: one side has the scale to withstand the rough months, the space, skill and money to adapt, the luck of which industry it is or the fortune of adept governance; the other side does not.
We can apply this thinking to people, businesses, even entire markets. Factors attributed well before this pandemic are rendering its impacts uneven: company size, location, industry; a person’s gender, ethnicity, socioeconomic background; an economy’s composition, governance, resilience. This is a crisis of winners and losers; the winners ride the wave, the losers are sunk. Perhaps it’s time this fact elicited a more targeted response.