Socialist Worker

Jobs meltdown as crisis grows

by Simon Basketter
Issue No. 2136

An astounding 80,000 jobs were axed in Britain, Europe and the US in just one day on Monday.

The harsh reality of the chaos of the market is now hitting workers across all sectors and industries.

The list of Monday’s job losses makes stark reading.

Caterpillar, the world’s largest maker of construction equipment, said it would cut 20,000 jobs. Sprint Nextel, the US mobile-phone operator, announced 8,000 jobs are to go.

DIY retailer Home Depot is cutting 7,000 jobs and freezing salaries.

Pharmaceutical company Pfizer said 19,500 jobs would go after its takeover of rival drugs company Wyeth.

US car giant General Motors announced 2,000 job losses at its plants in Michigan, and Texas Instruments said it would cut 3,400 posts.


It was not just a bleak day of job losses – but a symbol of how quickly the economic crisis is developing and who is being made to pay for it.

Steel company Corus, for example, is axing 3,500 jobs worldwide and has openly declaring it is doing so to increase profits.

Some 24 high street chains in Britain have gone into administration since last September.

That means over 55,000 predominantly low paid workers have either been sacked or are about to be thrown out of work.

In this context the Labour government’s talk of offering firms funding to retrain workers for an eventual economic recovery is a vastly inadequate response.

The reality is that at every stage of the unfolding crisis the government has stepped in to help keep bosses’ profits up but not to help ordinary people.

Of course not everyone is suffering from the economic crisis.

For instance, the billionaire hedge fund manager John Paulson has just made a £100 million profit by betting that the Royal Bank of Scotland’s share price would fall.

He made this profit at exactly the same time that Labour was throwing even more money at the bankers.

Paulson used the stock market scam of “short selling” – betting on the value of a company going down – to make the cash after Labour lifted its temporary ban on the practice.

We have seen two bank bailouts costing billions of pounds of public money. These have not saved jobs and have barely kept the banks afloat.

The government’s latest plan – due to be announced this week – is what the economists call quantitative easing.

Put simply, this is a fancy way of printing money. The government buys up government and commercial bonds and assets to inject money into the economy.


US economist Milton Friedman once compared this to dropping money from a helicopter.

This analogy captures the panic of the approach – but omits the fact that only businesses and banks are allowed to catch any of the cash.

Brown has tried to distance himself from the neoliberal policies that underpin the crisis.

This week he claimed that he had been warning for ten years that the international financial markets needed to be more strongly regulated.

This is simply not true.

As recently as 2006, Brown told the bosses’ CBI organisation, “I believe we should consider how we can continue to extend our risk-based approach, applying the concept of risk not just to the enforcement of regulation, but also to the design and indeed to the decision as to whether to regulate at all...

“And we will take the fight on deregulation to Europe.”

We cannot wait for Brown and his friends in the City to sort out the mess.

They are at the heart of the system that caused the chaos in the first place.

We have to fight against every cut and for every job – and to stop the pursuit of profit destroying the lives and futures of workers across the globe.

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Mobile users! Don't forget to add Socialist Worker to your home screen.