Coronavirus - Axe Falls on the Working Class

The effects of Covid-19 have been devastating. By November more than 50 million people worldwide had been infected and officially 1.2 million had died. These figures are certainly a big underestimation. In addition the IMF estimates the pandemic will plunge 90 million more people into extreme poverty, which means being forced to survive on less than $1.90 per day.

In Britain the second wave of infections is relentlessly building up. The priority of our rulers, of course, is to get as many of us as possible back into wage labour, producing profits for them, as soon as possible. Our deaths are collateral damage. Their scheme of a 3 tier local lockdown where some areas continue working while others are under different levels of lock down was aimed at this but the virus has run riot and continuing with this scheme was going to cause even more economic damage than abandoning it. Our rulers have been forced to impose another lockdown of the whole country and to extend the 80% wage scheme for workers prevented from working. This scheme left 2 million workers earning less than the minimum wage in April and the situation in November will be worse. For workers on below minimum wages who were previously just surviving, and those forced onto universal credit, this will mean even more hardship, missing meals, not paying the rent or even homelessness. Between 4 and 5 million children are now living in poverty.

The capitalist response to Covid is relentlessly creating misery! The government tells us we are all in this crisis together but that’s a lie. It’s not just wage cuts but also deaths from the virus which are falling most heavily on the working class and in particular on the most deprived and savagely exploited sectors, such as the sweatshops in Leicester and elsewhere where poor housing and overcrowding increases transmission of the disease. The ruling class has not taken pay cuts. Johnson even complained that his £150,000 salary was not enough to live on. According to the Swiss bank UBS, billionaires have actually seen their fortunes increase during the pandemic. They have risen by 27% since April and their net worth is now worth $10.2tn, equivalent to 12% of global GDP. Global inequality is becoming more and more obscene. The UK government, meanwhile, has used emergency powers legislated under Covid to hand out literally tens of billions in contracts to cronies and Tory donors, without any competition or oversight, in a display of shameless corruption.

The Eye of the Storm

The situation in Britain will get a lot worse in the months ahead. In November 5.5 million workers were on the 80% of wages furlough scheme. Many could not pay their bills on 100% of their wages and were going into debt. This 80% subsidy will be scaled down from December onwards just as the second wave of the virus infections is expected to peak. The new lockdown is expected to bankrupt many businesses, particularly in the services sector – approximately 80% of the UK economy. This will produce a mass of redundancies and many of those on furlough will be forced onto benefits. It is estimated that 1 in 8 of the working population will be unemployed, raising unemployment to 4 million or more. Since the benefits system, just like the health system, has been shredded over the last decade this is already creating massive hardship but will get much worse. We are at present in the eye of the storm but the full destructive force of this crisis is not far ahead. The collapse of the economy is matched only by what happened in the 1930s and is making the state less able to cushion the full effect of the meltdown.

Economic Collapse

The global economy had not recovered from the great recession of 2007/8 and was teetering on the brink of another economic crisis when Covid-19 struck. The virus has made a bad situation a whole lot worse. The capitalist class has met this disaster with massive injections of funds from the central banks. By October central banks have pumped $11.7 trillion, equivalent to 13% of global GDP, into the system. Almost none of this money has gone into productive investment. Instead it has gone into loan guarantees to industry to prevent bankruptcy, buying government debt, grants to locked-down workers and schemes to prevent social unrest. In the first 6 months of 2020 the British state has been forced to spend £300bn on measures to combat the virus. Each passing month and each new lockdown increase the amount which needs to be borrowed or printed. The national debt is now 104% of GDP and the GDP itself was predicted to contract by 10.4% in 2020 by the IMF. This calculation was made before the November lockdown so it will be even worse. The Bank of England is consulting commercial banks about introducing negative interest rates, the first time in its 326 years history. Economic figures which would normally be regarded as catastrophic are appearing every day. In short, capitalism worldwide is in a crisis of historic proportions. Interest and capital on these debts will have to be paid off or the currency will have to be devalued leading to massive inflation. Who is going to shoulder the burden of all this? Already Sunak has stated his intention of balancing the budget. As in all previous crises our rulers will try to load the effects of this crisis onto the backs of the working class.

Need for Collective Struggle

An indication of what is to come is shown by our rulers’ refusal to give the majority of essential workers a pay rise. After getting the country to join in a weekly clap for the wonderful work the health workers, particularly the nurses, were doing, they refused to give them a pay rise! Demonstrations by nurses have been ignored. Instead, a pay rise was given to their armed retainers – the police and army. The very forces they will use against us if there is any serious resistance on the streets to the austerity and taxes they plan to heap on us.

The working class produces not only all the goods and services which pay for our wages but also all the profits which the capitalist class share out among themselves. This is why our rulers are desperate to keep us working even if conditions are unsafe and some of us die. More workers are refusing to accept this. There have been strikes against work in unsafe conditions in many countries. In the UK postal workers have struck in many cities, there have been wildcat strikes by food workers in Northern Ireland and power workers at Alstom gas plant. Cleaners for Ridge Crest Cleaning have struck. “We are not prepared to die for your profits,” should be the general cry, but many workers have continued to work in unsafe conditions and unfortunately there have been many deaths, particularly among essential workers in health, food and transport. A collective refusal either to work in unsafe conditions or to accept pay cuts is needed. A fightback which spreads on a mass scale could halt all the capitalist attacks which are coming. But this would only be a start; a temporary victory. A more fundamental struggle for a new society is needed. A society organised to produce for human needs not for capitalist profit. Capitalism itself is the real problem, it is the real virus driving us to destruction. Capitalism needs to be overthrown!

The above article is taken from the current edition (No. 53) of Aurora, bulletin of the Communist Workers’ Organisation.