Early reports suggest that the reopening of indoor hospitality in England has driven a hiring surge as employers try to meet the expected demand across the sector. Job search website Adzuna has reported a trebling in the advertised vacancies since March but the impact of unlocking – and a much-anticipated surge in consumer spending – has spread well beyond the most tightly-restricted sectors. The monthly survey by the Chartered Institute of Personnel Development reports two-thirds of employers are looking to take on more staff, with just one in ten expecting to make redundancies. Over in the US, the combination of falling cases, a major improvement in vaccinations and the massive boost from the stimulus package – with more spending on the way – is having a similar effect, as employers report labour shortages across the economy.
All of this should be good news for those who work: other things being equal, tighter labour markets should mean better pay and conditions as employers seek to attract the workers they need. After a decade where incomes from labour have been severely depressed across the developed world – in the UK, average real wages and salaries are scarcely above their level a decade ago – this looks like a moment of hope for labour.
The “demographic reversal”
Intriguingly, it occurs at the point at which an interesting and important new book by two somewhat unorthodox economists, Charles Goodhart and Manoj Pradhan, argues that the 40 year period we have just lived through has come to an end. The great expansion of the global labour market since the late 1970s – in both the opening of Eastern Europe and, spectacularly, the opening of China – they argue saw the balance of power shift decisively in favour of capital, with wages and salaries forced downwards by the new abundance of cheaper labour across the globe. They argue that demographic changes are ending the period of cheap and abundant labour, heralding a future of higher pay (and higher inflation) as the balance swings back. It’s interesting, even optimistic, but not completely convincing: demography alone is rarely destiny, and it underplays the dimension of control over labour that – as much as pay alone has always been crucial to the real functioning of labour markets under capitalism. It is not only that you want to pay a worker to perform a task: it is essential that the task is performed in the way that you, the employer, expect it to be performed. Mechanisms for controlling labour have ranged from the firm-level imposition of management commands, to the economy-level presence of unemployment as a disciplinary threat, to the direct management of people, as China’s hukou system creates, and as migration controls often try to impose.
Covid as a disruptive factor
The issue of control brings us back to covid – a profoundly disruptive factor in the organisation and management of the economy. Whilst a number of countries that suffered most in the first wave, Britain amongst them, now appear to bringing the virus under control, global cases reached their peak only at the end of April, driven by the devastating surge in India. But even some countries that seemed to get through the first 12 months of the pandemic in better shape are now reporting surges in cases, with both Singapore and Taiwan hastily expanding social distancing measures.
Covax, the initiative to supply vaccines to the world’s poorest, co-ordinated by the World Health Organisation, has never been ambitious enough, with only a fraction of available vaccine supply being provided by the richer countries. But even this initiative is now struggling to meet its own targets. Fewer vaccines means more infections, and more infections raises the possibility of new variants spreading – as we have seen in England with one of the SARS-Cov-2 mutations first seen in India being placed on Public Health England’s “variants of concern” list. There are rumours of a return to lockdowns in England, perhaps on a regional basis – with local leaders like Andy Burnham understandably furious at economic damage this will almost certainly cause in already hard-hit parts of the country.
We are a long way from being out of this crisis, and further economic disruption should be expected – certainly whilst the production and distribution of vaccines remains inadequate. But for as long as this involves a disruption to how and where work can be performed – which is, at its core, the source of social distancing’s deep economic impact – we are likely also to see a struggle over how that work is conducted. A recent survey by German thinktank the Rosa Luxemburg Foundation found a growing number of labour protests, including strikes, with health and safety concerns at their centre, shifting away from the more usual focus on pay. Control of work may well come to define the new frontier for tensions and conflict between capital and labour: one side introducing a raft of new surveillance technology, for example, the other insisting on greater control over time and protection at work.