Well we are now many weeks into the lockdown ....
... so many in fact, that I sometimes find it hard to actually recall when exactly the 'New Normal' started, or what life was like before the Coronavirus erupted onto an unprepared world.
However the catastrophic economic fallout of the Coronavirus pandemic is now starting to be reported .... and its a total disaster for millions of people worldwide.
In the UK alone, the welfare benefit claimant count in April 2020, has gone up by 856,500 to 2.1 million, and its expected that next months figures will push this to well over a million extra, newly unemployed. The human impact of this, is not just on the freshly unemployed (many of whom will not have been forced on to the state benefit system ever before), but also on their dependants who will be joining them in this sad situation.
I used to administer welfare benefits many years ago, and know from personal experience that these people face a daunting and sobering realisation of what being unemployed can mean. Some, those older ones (and some of the younger ones), may never get out of the poverty trap that long-term unemployment represents. The figures are going to be similar to the 1980's and early 1990's, and the damage wont just be to peoples finances (although that would be bad enough), but there will be increased incidences of mental health issues, an increase in suicides and drug taking, as well as in crime.
The unemployment levels globally are just as bad, if not worse elsewhere, and in the USA for example, 36 million - nearly a quarter of the American workforce - are now registered as unemployed, and that is expected to rise in the next published figures. That's the sort of unemployment level last seen in the USA during the Great Depression of the 1930's .... yes the same levels that led to Hitler and Mussolini in Europe, and mass make work programs such as 'The New Deal' in the USA.
In the UK, the unemployment figures are partially masked by the governments furlough payments for those temporarily laid off. But many of those currently on furlough until October in the UK will later become fully unemployed, as their employers simply fail to reopen later in the year.
In the rest of the world, the UN has suggested that at least half the world's workforce could be left unemployed or without income, as a result of the global lockdown's to prevent the coronavirus spread. That means hunger, poverty, misery and even starvation for many millions worldwide for some years to come, and ironically most of those whose lives are destroyed would not have died of the actual Covid-19 virus if no lockdown's had taken place..
This event will mark a generation for a decade around the globe .... but ironically China will likely not be impacted anything like as badly as the rest of the world. Its manufacturing figures have already recovered, with a 3.9 percent increase in April 2020 (year on year). China's manufacturing industry still accounts for more than 25 percent of the world's total manufacturing output, but pandemic-triggered recessions around the world may well damage their manufacturers export markets (which however, they may make up for by internal market growth). Indeed the fact that China may not even have gone into anything more than a technical recession, while its customers may be in deep recessions for a decade, will not have escaped many peoples notice.
The political fallout from all of this hasn't yet really begun, but its possible that China will eventually be hit with the consequences, if the reports from Bloomberg are to be believed. They have suggested that 1,000 American multinationals have been approached by India, to relocate their offshore manufacturing operations from China, to a new pool of land twice the size of Luxembourg, which is being prepared for industrial usage. Its being suggested that Apple is considering moving a fifth of its production from China to India. Other reports state that Japan is going to be setting up a subsidy program, to encourage its domestic manufacturers to transfer their overseas production bases to South-east Asia from China.
Now there are many reasons why this mass movement from the China to India (or South-east Asia), may come to nothing (not least of which is the education and work ethic of the average Chinese worker, which is perceived to be somewhat better than the that of Indian or other Asian workers), including Indian, power, road and rail infrastructure, which are generally poorer in India than China, and the state of India's financial institutions which are not as robust as those in China. But the fact that this sort of mass abandonment of China is now even being considered by many firms (especially from the US, where the damage has fuelled a strong anti-China sentiment), is an indication of what is likely to come over the next couple of years.
Stalin is famously reported to have said “If only one man dies of hunger, that is a tragedy. If millions die, that’s only statistics.” .... well, we are likely to be seeing a lot of statistics, that are made up of a large number of personal tragedies, over the next 18 months.
 |
| We Are In Danger Of Thinking Of Just The Statistics ...... |
... so many in fact, that I sometimes find it hard to actually recall when exactly the 'New Normal' started, or what life was like before the Coronavirus erupted onto an unprepared world.
However the catastrophic economic fallout of the Coronavirus pandemic is now starting to be reported .... and its a total disaster for millions of people worldwide.
 |
| Unemployment Rates Now Expected To Rise Sharply This Year ....... |
In the UK alone, the welfare benefit claimant count in April 2020, has gone up by 856,500 to 2.1 million, and its expected that next months figures will push this to well over a million extra, newly unemployed. The human impact of this, is not just on the freshly unemployed (many of whom will not have been forced on to the state benefit system ever before), but also on their dependants who will be joining them in this sad situation.
I used to administer welfare benefits many years ago, and know from personal experience that these people face a daunting and sobering realisation of what being unemployed can mean. Some, those older ones (and some of the younger ones), may never get out of the poverty trap that long-term unemployment represents. The figures are going to be similar to the 1980's and early 1990's, and the damage wont just be to peoples finances (although that would be bad enough), but there will be increased incidences of mental health issues, an increase in suicides and drug taking, as well as in crime.
The unemployment levels globally are just as bad, if not worse elsewhere, and in the USA for example, 36 million - nearly a quarter of the American workforce - are now registered as unemployed, and that is expected to rise in the next published figures. That's the sort of unemployment level last seen in the USA during the Great Depression of the 1930's .... yes the same levels that led to Hitler and Mussolini in Europe, and mass make work programs such as 'The New Deal' in the USA.
In the UK, the unemployment figures are partially masked by the governments furlough payments for those temporarily laid off. But many of those currently on furlough until October in the UK will later become fully unemployed, as their employers simply fail to reopen later in the year.
In the rest of the world, the UN has suggested that at least half the world's workforce could be left unemployed or without income, as a result of the global lockdown's to prevent the coronavirus spread. That means hunger, poverty, misery and even starvation for many millions worldwide for some years to come, and ironically most of those whose lives are destroyed would not have died of the actual Covid-19 virus if no lockdown's had taken place..
This event will mark a generation for a decade around the globe .... but ironically China will likely not be impacted anything like as badly as the rest of the world. Its manufacturing figures have already recovered, with a 3.9 percent increase in April 2020 (year on year). China's manufacturing industry still accounts for more than 25 percent of the world's total manufacturing output, but pandemic-triggered recessions around the world may well damage their manufacturers export markets (which however, they may make up for by internal market growth). Indeed the fact that China may not even have gone into anything more than a technical recession, while its customers may be in deep recessions for a decade, will not have escaped many peoples notice.
The political fallout from all of this hasn't yet really begun, but its possible that China will eventually be hit with the consequences, if the reports from Bloomberg are to be believed. They have suggested that 1,000 American multinationals have been approached by India, to relocate their offshore manufacturing operations from China, to a new pool of land twice the size of Luxembourg, which is being prepared for industrial usage. Its being suggested that Apple is considering moving a fifth of its production from China to India. Other reports state that Japan is going to be setting up a subsidy program, to encourage its domestic manufacturers to transfer their overseas production bases to South-east Asia from China.
Now there are many reasons why this mass movement from the China to India (or South-east Asia), may come to nothing (not least of which is the education and work ethic of the average Chinese worker, which is perceived to be somewhat better than the that of Indian or other Asian workers), including Indian, power, road and rail infrastructure, which are generally poorer in India than China, and the state of India's financial institutions which are not as robust as those in China. But the fact that this sort of mass abandonment of China is now even being considered by many firms (especially from the US, where the damage has fuelled a strong anti-China sentiment), is an indication of what is likely to come over the next couple of years.
Stalin is famously reported to have said “If only one man dies of hunger, that is a tragedy. If millions die, that’s only statistics.” .... well, we are likely to be seeing a lot of statistics, that are made up of a large number of personal tragedies, over the next 18 months.
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