To those who keep saying the “economy will recover”

[Sadie789]

And who think focusing on the economy is “money over lives”.

Please can you explain to me why you are so relaxed about this, because it affects every one of us.

This won’t be a UK recession, it will be an unprecedented global recession.

People already have lost their jobs and will continue to lose their jobs long after lockdown is over. Well into next year.

If you lose your job you need to claim UC. UC is paid for with taxes. From people who are earning money in jobs.

Taxes also pay for the NHS. Not just the NHS that is treating COVID patients. The NHS treating cancer patients, kidney patients, heart patients, brain patients. The NHS that also keeps thousands of private companies afloat as they sub services and procure resources from them.

Tax pays for just about everything else we take for granted in our daily lives from housing for millions to keeping rubbish from overflowing our streets to keeping the street lights on.

Let’s put the wider issue of how the economy runs to the side and look at individual livelihoods. People say you should have savings to cover emergencies such as these current rainy days. But this rain is unprecedented and affects us all.

DH and I have about £16000 in savings. We both work in roles that are looking very uncertain right now. If we both lose our jobs those savings will last us about 4 months realistically. If only one of us does it will last 8 months. Til the end of this year more or less. When our industries will both still be in an uncertain state of flux. Just get another job you say? What, like thousands of others in the same boat?

When the savings run out what do we do? We’d have to sell the house. There’s some equity in there but it will go down dramatically as house prices drop. Who will buy our house? If we do sell, we will need a mortgage to buy a new one - who gives mortgages to two unemployed people. Could we rent? The equity would soon run out and then who pays for the roof over our heads? So on, and so on.

The economy is about money and greed I hear people say. Lives are more important. Yes they are. But the people saying this in the context of a blase “the economy will recover”, I genuinely want to know why you think an economic depression will not affect lives?

Only the rich are worried about businesses going under is another one I hear.

Let’s see. My neighbour has his own company doing lighting and rigging for theatres. His wife has a wedding dress shop. No one is paying them furlough. They are both terrified.

Around me are a fishmonger who supplied hotels and restaurants. A nursery owner. A pub owner. A mortgage advisor. A friend is a pilot, his wife cabin crew. Another has been running a small childrenswear shop for 22 years and says this will be her last month as she’s bought thousands of pounds of stock (last year) for summer that she has to pay for along with the rent etc. Her business is finished. My hairdressers have shut up shop for good. Our main shopping centre has lost Debenhams, Oasis, Warehouse, all in a month.

Please tell me - this is a genuine question - how you can be so nonchalant about the economy if that is what you truly believe?

@mintymabel I never suggested there wouldn’t be a settled contraction in the economy, but it will be nowhere near the level that it is right now and it is ridiculous to suggest it will

What do you mean by a "settled contraction"? That sounds like code for a recession/economic depression to me.

I’m concerned that our way of life is going to change permanently. The economy as a whole will recover at some point, but I don’t think our high streets will. A lot of businesses that were struggling before the pandemic will not reopen.

So, to some extent I think the “most severe recession ever” is an abstract concept because every recession is worse than the one before and a lot of the money isn’t actually real to begin with. What I think will be different this time is that more industries will cease leading to long term unemployment for many.

But. It is what it is. The global recession has been caused by a global pandemic. The economy is fucked in the short term, whatever steps we do or don’t take to protect people’s health. So I want a government that does try to protect people’s lives, health and well-being.

Thanks @ Minty Mabel, it is surprising that, as you suggest, somewhere along the supply chain there are all too many people taking the multiple opportunities to do the wrong thing.

Within my experience, a building regs department believed, wrongly of course, that compliance with the then disability equality act was something they should ignore, not ensure. So did the planning comittee. So did the head of traffic (responsible, among other things, for providing blue badge parking spaces), who stated "equalities doesn't apply in my department, it isn't relevant".

So, a newbuild shop on a sloping site with only one end level with the pavement is built with the door positioned where it will require delivery drivers and disabled customers and staff to climb up steps. Narrow door openings provide minor cost shaving, bariatric electric wheelchair users cannot access even the rare supposedly 'acessible' units.

Grenfell made it common knowledge that materials are wrongly chosen, yet often are (only just) regulation compliant which is the sole consideration. Before then, I had been astonished when a sound proofing firm told me that a trivial difference in cost separated their two products, one an effective sound insulation, the other one they were ashamed to put their name to, knowing it would allow noise nuisance between flats. The inferior product, by a whisker, scraped into the strictly enforcable compliance category. For the sake of a tiny cost saving, the inferior material was nearly invariably selected by clients who wouldn't have to live in needlessly nasty built world they were creating.

My hope would be that Grenfell and Covid and Climate Emergency might together be enough to shake those in power into ruling that nothing may be built that isn't eco friendly and user friendly. Green walls, balconies, solar panels, reduced water consumption would be taken for granted. There is no place for a built environment of shoddy overpriced rabbit hutches. Social housing is the only remaining customer, if artificial incentives to buy are at an end, and people in yet another round of negative equity begin to pronounce the word 'housing' without automatically adding the word 'ladder'. Lockdown has made the general population encounter the solitary confinement or imprisonment in cramped tiny spaces with no view and no balcony, which is daily life for many disabled and old people .

Creating a pleasant affordable built environment may now be something builders get the chance to do. At last. Scrabbling to do the worst that can be got away with, for the highest price that can only be got away with by taxpayers subsidies, might now be seen as outdated. At last .

“Unemployment is up, but the vast majority of people are still working. There will be a reduction in unemployment once businesses start to open up“

Some businesses won’t reopen, some will close again... hospitality, leisure, some retail just don’t generate enough income with social distancing measures in place - and they’re the type of business people avoid as an unnecessary risk anyway, people were already avoiding them.

I don’t know about the hospitality trade losing out. All our shops are packed even with social distancing. The supermarkets are always busy. The small expensive local butcher delivers now but still has a constant stream of people at the door .As do the veg shops. The same us true of the restaurant's and pubs that are still doing delivery and take away.

I do think most of it is because people are now home when the high street is open. Once people go back to work it will be a shock. Hopefully the high street has woken up to the fact that closing at 5.30 when people are working is stupid,
Who do we think are being made redundant?

For the sake of a tiny cost saving, the inferior material was nearly invariably selected by clients who wouldn't have to live in needlessly nasty built world they were creating.

@20mum It will have been one of a list of identified savings that added up to bring a project back to budget. The only question asked would have been “is it compliant?” If yes, Tick in the box. That’s what it comes down to when clients (especially in the local authorities) have budgets that are squeezed. The project isn’t on budget, it doesn’t go ahead and the all signing all dancing project is stripped back to the bones in order to get it built.

My hope would be that Grenfell and Covid and Climate Emergency might together be enough to shake those in power into ruling that nothing may be built that isn't eco friendly and user friendly.

Post grenfell, fire safety is a priority with pretty much every client I work with. One thing never on the list of savings now is anything to do with fire safety. Climate wise, building regulations are pretty well set up to ensure a level of sustainability and energy efficiency and it is now an inherent part of building rather than the nice to have it has sat at for too long.

Post Covid? One thing architects are starting to look at more is work space in homes. It has been a feature in new builds for a while but I reckon we’ll see more of it.

who stated "equalities doesn't apply in my department, it isn't relevant

Lack of accessibility, best not get me started on that one, it’s a hobby horse of mine! It is far too easy to do the bare minimum here and beyond the most basic provision, you can avoid having to be accessible by having an alternative plan. So as long as yer man there writes a plan that anyone applying for a role who need accessibility can work in another building, that’s the box ticked. There is also a massive disparity between what is built and how it is operated. I see retail planners tying themselves in knots to make sure aisles in shops are wide enough, DDA desks clear and easy to access, then the operator comes in and overloads the floors and desks with point of sale racks to increase takings. External space sacrificed for BB spaces but no obligation on the user to make sure they are not abused. It’s typical of UK attitudes to disability and it sucks!

If I were poor in India or Malawi, I would be very worried.

Poor here...not so much.

Would definitely prefer to see a sustainable economy than senseless "growth" with huge costs (including CV19!)

People working in clothes shops... how do you try them on? If you’re not, online is easier.

Pub workers, those that don’t do food won’t survive.

Hairdressers - the k recommendations they’re looking at currently are less people in at once, longer between appointments to clean and no dry cuts or blow dryers... so much customers through the door and then longer with each customer and blow drying as well as being handy, is paid for usually.... places where it’s one or two hairdressers usually might manage, bigger salons won’t.

Restaurant staff if the takeaway/delivery doesn’t make enough, then they’ll close because social distancing decimates how many covers and sittings you fit in.

Things like exercise classes - they don’t make money without being too close together.

Hotel staff - just the cleaning alone ... it’d take days to turnover the rooms.... that’s a massive hike in costs.

Then you’ve got the knock on businesses from those - suppliers, equipment repairs/replacements...

Nightclub/event staff

Those are just the ones I have experience with, I’m sure there’s more - but a lot of those are the sort of businesses that don’t have huge reserves to diversify or rebuild to make them profitable and can’t keep staff on if they’re not making a profit.

What do you mean by a "settled contraction"? That sounds like code for a recession/economic depression to me.

Again, I never said there wouldn’t be a recession. That’s likely. But it will not remain at the current levels as so many seem to suggest and using these figures to predict the future is futile.

A lot of businesses that were struggling before the pandemic will not reopen.

Those businesses would have ultimately failed anyway. That’s not the fault of Covid.

how do you envisage the cost of the current economic protection will be paid for?

@boobmoob That will largely depend on whether the tories remain in power or whether there will be a reckoning leading to election. But there is no way any government will try to claw it back in 6 months time.

It will not be an even hit. In Crawley, which is highly dependent on the airline industry and Gatwick, there are estimates that 57% of jobs could be lost. BA and Virgin airlines have already made job cuts and relocated all operations to heathrow. There are huge supply chains dependent on the airport from hotels, taxi drivers, food suppliers and engineering and other highly skilled jobs.

@MintyMabel it's way too simplistic to think millions of people can down tools, businesses can close & they all reopen as if nothing has happened. Social distancing costs, even Amazon reported substantial costs.

That will largely depend on whether the tories remain in power or whether there will be a reckoning leading to election. But there is no way any government will try to claw it back in 6 months time.

Why would any gov try and claw it back in 6 months time? How do you think it will be paid for regardless of who is in power?

Of course it will recover. Might take a while though.....

If people think that the economy in 2019 had only just/still hadn’t recovered from the 2008 crash despite all of the statistics stating otherwise there will no doubt be some who similarly claim that the world never recovers from CV19!

@Byzantineprincess Economists would disagree with you www.ifs.org.uk/publications/13302
GDP (national income) is just 11% higher today than it was at its pre crisis peak in 2007–08. As a result the economy is 16%, or £300 billion, smaller than it would have been had it followed the pre-crisis trend. GDP per capita is now £5,900 per person lower than it might have been had pre crisis trends continued.

That’s absolutely not the same as saying ‘the economy hasn’t recovered’. By that argument, until it reaches the levels that it was heading before it crashed, it never recovers! That’s simply not how economies work; given they grow at different levels you could pick a time when growth was high and then extrapolate growth from that and say ‘the economy has never recovered from X year’ which happened to be a high growth year.

When the economy hit the GDP/unemployment or whatever metric you choose as it was just pre the 2008 crash, that’s when I’d argue it ‘recovered’ from that crash. Which happened way before 2019

Economists tend to predict the worse and their views vary lots. They all predicted the end of the world with Brexit and that hasn't happened.

I am not going to panic, yes I think we will go into a recession, how bad it will be no one really knows. No one, even the economists or your DH employer has a crystal ball. There is no point panicking about it as there is nothing you can do to control it. It's going to happen and we are going to have to ride it. We have been in recessions before and have always come out of them and this will happen again. I remembered hearing all of this when the 2008 recession happened and we came through that. We will come through this too.

It will obviously recover because it always does, we don’t just live in an eternal recession.

Agree with Byzantine

There are cycles anyway aren’t there so there’s no point in saying if we had stuck on the highest trajectory. There’ll always be a point where you could pick the highest and say if we had stuck to that.

Exactly, you could probably go back to before the Great Depression in the 30’s and say ‘We’ve never recovered, if we’d stayed on that path we’d be literally twice as rich!’ It simply doesn’t work like that.

If GDP, employment etc had still not reached 2008 levels then yeah we haven’t recovered from that crash. But we did, about 5ish years after.

The thing is we are looking at 30k deaths and saying we locked down for that, the hospitals are coping so why? No one knows what position we would be in without lockdown, how many deaths, how many job losses (without a furlough scheme). We can not categorically say our position is worse due to the lockdown as we simply don't know.

We did recover from 2008 but lots would argue that it took around 10 yrs. Unemployment wasn't a huge effect of that crash, it was wage stagnation & the rise of the gig economy.

Japan didn't recover as such from their last recession - zero growth has dogged their economy for years. Some would even argue that low growth is a feature of a modern economy.

Sure there will be a bounce back of sorts - but the climb back to where we were in Dec 19 will be slow and painful. And I think most of the pain has yet to come, when the Gov stabilisers come off it will not be pleasant and the longer we stay in lockdown the worse it will be.

The economy will need people to spend to help it recover but will they have the appetite for it? A more rational approach would be to save at the moment in preparation for hard times to come - I think businesses will be thinking the same.
More people working from home, fewer people travelling/no flights/hotels, less lunches/coffees bought, less rent paid on office space. It's doesn't take a majority of people making these changes to cause business income to fall. A twenty percent reduction in footfall can spell the end for many businesses.
I know we are not planning to spend on projects we had earmarked, belt tightening feels more prudent.

why worry

I agree with @Greengrassgravy it's the aftershocks.

A more rational approach would be to save at the moment in preparation for hard times to come - I think businesses will be thinking the same.

This is surely prudent for most people/businesses as it's all so unknown. DHs work has had bonuses cancelled & some pay rises stopped even though business hasn't been affected.

A twenty percent reduction in footfall can spell the end for many businesses.

Exactly, many businesses operate on tight margins.