Leiden International Studies Blog

Covid-19 and labour: Workers are set to pay the price of the pandemic

Covid-19 and labour: Workers are set to pay the price of the pandemic

Shakespeare once wrote “the web of our life is of a mingled yarn, good and ill together”. In the book The Great Leveler, Walter Scheidel claims that violence has historically reduced economic inequality, and catastrophes are therefore somehow a historical human necessity since the Stone Age.

Inequality is reduced by those wars that “penetrate society as a whole” (p. 6) and by revolutionary “violent societal restructuring” (p. 7), including state failure. According to Scheidel, plagues and pandemics are also “horsemen of violent levelling” (p. 8).
This view of history, albeit interesting, seems not to take into account enough a fundamental aspect of our times: capitalist finance, a recent phenomenon of human history, which has reached colossal dimensions at present. If we ask, how is covid-19 affecting labour and workers, we see good and evil are not fairly spread amongst humans, and the two forces remain quite distinct and distinguishable one from the other. This can only increase inequality. Since many equate the economic effects of covid-19 to those of a war, it is interesting to look into these effects by using labour as a parameter of analysis.

The history of capitalism teaches us that a crisis always exacerbates labour versus capital relations. For example, the First World War gave birth to the Bolshevik Revolution in Russia, while the Second World War resulted in the creation of a global monetary and financial system in which capital controls labour. In the former case, it was the workers who prevailed, while in the latter it was capital that triumphed. The covid-19 crisis is yet another of these pivotal moments in history.

To confront the economic downturn created by covid-19, governments are spending public money and inevitably accumulating national debt, with interest that will need to be repaid. In fact, handing out money interest-free (subsidies and grants) is inadmissible for the neoliberal global financial system. A debtor-creditor relationship is one between unequal subjects, with creditors in a privileged position. These creditors include investment firms, mutual and hedge funds, investment banks, and multilateral financial institutions. They evaluate and determine debtors’ decision-making processes. The debtors in this case are the countries who are today providing subsidies for those of their citizens who cannot work.

Financial creditor bodies dictate the social and economic policies of indebted governments. It is not in their interest to promote the welfare state or workers’ wellbeing. This means that these creditors always demand that indebted governments apply their neoliberal “philosophy”, which is to cut government spending in the medium to long-run, privatize and curb labour rights. A few weeks ago, for example, owing to the covid-19 crisis, the Australian parliament passed a plan to support wages for millions of workers. This provoked dismay and criticism in financial circles (creditors). The rating agencies immediately downgraded the outlook for Australian government bonds (its debt), and the interest rate for government bonds rose (together with the profits made by the creditors). Job protection is a sacrosanct duty of governments, but it seems that this is unacceptable to neoliberals. Grants and subsides are inconceivable because they fall outside the debt trap, and the interest logic.

At some point in time, nations will be asked to pull together for the common good, and citizens will be asked to make sacrifices, give up their labour rights and lower their expectations (wages, holidays, etc.) so that these debts can be paid off. But what is a nation? It is a variegated body, which Benedict Anderson’s conceptualisation of it as “constructed” and “imagined”, existing, if anything, in the minds of people, does not fully account for. Like a human body, a community of citizens (a nation) is made up of different vital organs: some call them classes, some call them income groups and some call them social categories (employment sectors). Will all the sections of a nation make a sacrifice in the same way and in proportion to their wealth? This question is seldom discussed in the mainstream media, and certainly not emphatically enough.

When a nation borrows or overspends, it is important to ask who is behind the decision-making process (governments and international financial institutions) and how these decisions are taken. It is vital to pose these questions in order to be able to distinguish between losers and winners in a society (a nation): who bears the burden of an economic recovery after a disaster? Economic history shows us that it is usually the weaker and poorer among us. At the same time, chaos produces profit, and there will be winners. Apple, Google, Amazon and the financial funds are already amassing an incredible amount of wealth, and these are all companies that are not known for being champions of labour rights.

The old welfare state is in danger like never before. The pandemic has revealed that national health systems around the world are already in shambles. Many countries have implemented neoliberal restructuring, which also means reductions in public health expenditure. Public spending cuts and privatization lie at the origin of the problem covid-19 has detonated. Market logic has also determined the delocalization of production to places where labour is cheaper. The shortage of masks and hand sanitizer in Europe is the result of Europe not producing it any more, because labour is too expensive. Concomitantly, cancellation of orders of consumer products by large European corporations like H&M, for instance, have led to the loss of jobs for millions in the garment industry in countries like Bangladesh.

There is a high likelihood that pensions and unemployment benefits will be hit by conditionality associated with debt. The European Stability Mechanism (esm), which was designed by the eu member states in 2010-2011, is the way Brussels envisages “solidarity” between eu member states. Greece docet. A linear cut in pensions, public expenditures and salaries can be predicted for many eu countries: this is what the current quarrel between the Southern and Northern European countries is about. Of course, the net losers will be beneficiaries of welfare provisions, the working class and the elderly. Bond owners will barely be touched by these measures; on the contrary, they will come out as winners thanks to a combination of high interest and cheap assets (land, housing, etc.). To say “we’re all in this together” in the face of adversity is misology.

The combination of covid-19 and neoliberalism has also direct effects on labour. We see evidence of this in the transformations taking place in the working world, such as teleworking (which university teachers, the intelligentsia, have uncritically accepted and adopted). Technology enthusiasts unquestioningly follow the fanfares of the mainstream media. They call labour “smart”. The transformation of labour into smart work has cast a shadow over the perils of the post-Newtonian world, where space and time assume absolutistic values, and where humans are made subject to the gods of technology and logarithms. Smart working or teleworking means transcending the “social”, and therefore leads to social disintegration. Workers become individual terminals of a production network. Teleworking increases social alienation and individual disaffection. Workers’ unity and solidarity fade away, and workers become an amorphous multitude of individuals, a biomass kept together by artificial intelligence. This karstic continuation of capitalism in new guises means that workers enter into a type of industrial relationship in which the bosses are computers, software and algorithms with which it is impossible to reason or negotiate, hence the aforementioned absolutism of values (see Ken Loach last film Sorry We Missed You). Is this actually smart or dumb work? Does flexible mean disposable? Is agile work restless and leading to long working hours? Let’s use the right adjectives.

Some say that life after the pandemic won’t ever be the same, and life also means work. Public figures, who express this view, are either fools or Machiavellian tacticians, the difference being that the former don’t know what they are talking about, while the latter do. Amazon and the like are thriving in pandemic times, which has made fools and Machiavellians alike believe that this is the future. In online retailing companies, in delivery companies, in call centres and so on, workers’ rights and freedoms are at their lowest level of decency, and are continuing to be reduced. Workers are controlled by bracelets or cameras, industrial relations are governed by a points method aligned with a system of reward and punishment, going to the bathroom can result in a points deduction. What does this bode for the post-pandemic way of working? The extraction of value from labour will reach levels that have never been seen since the rise of capitalism. Mind that only slaves produce absolute value, because they have no freedom. The tendency is therefore a worrying one, especially since most countries ratified the ilo Decent Labour Agenda.

Layoffs have spiralled with the covid-19 pandemic. So-called “unskilled” and frontline workers are praised, be they health service staff, supermarket workers, riders, delivery personnel or cleaners. Their work is crucial to society, and always has been. It seems that people are better able to realize this now that they are locked in their homes. But workers are also being battered because of covid-19. For example, according to Labour Days, a labour movement media organization, Virgin Atlantic Airways (vaa) put all its crews on eight weeks unpaid leave and then went crying to the uk government that it needed a £7.5 billion public bailout. vaa is pushing this as a way of safeguarding jobs for the future, apparently with the support of the pilots’ union. However, the few people who own and manage the Virgin Group are personally worth literally billions of dollars. vaa has 8,500 employees. It would cost £4.2 million to pay all these employees £500 a week to cover their leave, a total cost of £34 million for 8 weeks. The billionaires who own vaa can more than afford to pay these wages, but they do not. There are thousands of similar examples globally. The ilo currently estimates the loss of hours of waged workers linked to the pandemic to be 6.7% of the global total. This equals around 200 million wage-paying jobs. If self-employed and informal workers are added to this, the number soars to 1.25 billion people (see ilo, covid-19 et le monde du travail).

What about universities? Governments are issuing decrees to stop massive layoff trends; how this will play out for university staff is still to be determined. In 2019, the Association of Universities in the Netherlands (vsnu) reported how the budget reallocation proposed by the Van Rijn Committee will negatively affect Dutch universities. The vsnu also warned about the Dutch government’s new budgetary allocations and connected financial cuts. This occurred before the covid-19 eruption. Already by then, some academics began worrying about the effects of such measures on universities and their students as these measures are part of a more general cultural decline – culture is an important remedy against techno-scientific absolutism and related societal squalor. Furthermore some academics are precarious workers on temporary contracts with poor working conditions. Teaching programmes heavily rely on them, on their dedication to teaching and research. Students need this labour. How will coronavirus affect furlough labour schemes? Will universities be forced to stop hiring? Will they layoff adjunct staff? These are real and palpable concerns and a strategy needs to be put in place to address them.

What is happening in the realm of labour shows that the covid-19 crisis is a litmus test for our societies. Welfare and the workplace seem defenceless against the financial and the neoliberal, capitalist logic; universities being no exception. But what happens in the workplace usually carries over into the domestic sphere, and children will be affected by what happens to their working mothers and fathers. It is their future we are talking about. Crises, including pandemics, eventually fade away, while humanity remains. Beware of those who claim that “we are all in the same boat”, because in the covid-19 choppy sea of despair, some (a few) are sailing on yachts while others (the many) are floating on rickety rafts.