ourEconomy: Analysis

Covid reshaped the global labour market – these strikes are just the start

Between ageing populations, shifting attitudes and challenges to capitalist beliefs, workers have unprecedented power

James Meadway
17 February 2023, 2.39pm
Striking nurses in London, January 2023

SOPA Images Limited / Alamy Stock Photo

As strikes and labour disputes surge around the world, we appear to be at the beginning of a period in which the balance of power in workplaces and labour markets swings in favour of workers, having long been skewed against them.

Covid-19 has been a catalyst for this. Capital internationalised dramatically from the end of the 1970s to the late 2000s, with global trade and flows of capital growing hugely quicker than the economy as a whole. The number of labour disputes globally dropped over the same period and industrial disputes became more localised, with little correlation between the number of strikes in any two countries, and very limited international coordination of any kind.

Then came the pandemic. Its initial impact was as an immensely disturbing force to the formal structures of globalisation – the movement of goods and, more fundamentally, people were hit by lockdowns, supply chain disruptions, travel restrictions and so on.

But there has been a flipside to this impact: a profound and global medical crisis. We were all affected by the same novel virus. Our personal experiences will have varied, and our governments worked in different ways, but the biological shock was shared.

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French historian Emanuel Le Roy Ladurie once described the “unification of the world by disease”. The Black Death of the late 14th century delivered a hammer blow to European feudalism and then, as a new capitalist order arose on the back of it, European colonisation in the Americas was aided by the spread of Eurasian diseases like smallpox into an immunologically naïve population. Both these processes together, Le Roy Ladurie argued, cleared the path to a globalised capitalist economy.

What we have witnessed, by analogy, over the past few years, is something like the ‘unification of the proletariat by disease’. The same disease attacked all of us. We share a common vulnerability as a result of our common biology, and the same terrible experience happened to everyone at a broadly similar time. This necessarily common experience has worked against the tendencies towards economic divergence and deglobalisation that Covid accelerated.

There is a broader mechanism at work here. All of us are being drawn deeper into the ecological catastrophe. Extreme weather becomes more frequent, and moves from the periphery of the global system to its developed core; the prices and supplies of essential goods and services are thrown into chaos; even the most technologically advanced products of industrial civilisation, manufactured in its richest countries, are disrupted. A common experience of ecological disaster is forcibly uniting all of us, creating what sociologist John Bellamy Foster has called a global “environmental proletariat”.

Covid reinforced that process of ecological convergence. It provided a common, background standard of experience in the disease itself. However poorly or well one’s national government performed, the common experience was of a specific kind of new misery and uncertainty in the world. As inflation has surged in the wake of Covid, this, too, has provided a common experience of the ‘cost of living crisis’.

The ideological challenge

The pandemic also called into question the core ideologies of work and capitalism. The sudden challenges to commonsense beliefs about the world – that government funds were limited, that state welfare could not be generous, that the economy cannot simply be reshaped – were stark.

And there has been a jarring switch from the praise of workers on the frontlines during the first years of the pandemic, from nurses to delivery drivers, to their treatment in the years since. Real wages for many supposedly ‘key’ or ‘essential workers’ have fallen rapidly.

The pandemic called into question the core ideologies of work and capitalism

This chasm between the ideology of work and its actual experience perhaps helps to account for the substantial public support the strikers have enjoyed in both the US and the UK. Indeed, current UK polling suggests that the strikers are steadily winning more support as disputes grind on. The ‘Great Resignation’ of 2021 was another symptom of this change in people’s relationship to the work they performed, pre-dating the shift into collective action.

Tightening of labour markets

Covid’s longer-term economic impact is likely to be on the labour market, particularly as the health impacts of the pandemic become clearer.

While the number of ‘long Covid’ sufferers globally is unknown, an estimate in The Lancet suggests 45% of those with Covid suffered some significant ill effects four months after initial infection. In the UK, long Covid is reducing the labour supply by around 110,000 a week, and it is estimated to have taken around 1.1 million people out of the US’s labour force.

Other long-term health conditions have also been worsened by the pandemic, partly from the direct effects of Covid, but also as care systems were overloaded with covid cases and other illnesses went untreated. The result is a reduction in the number of workers willing and able to work.

And the psychological effects of the pandemic, closely allied to the ideological shake-up, appear to have been significant. The effect varies between countries but a large number of people, especially older workers, have taken the opportunity to cut back on their hours in formal employment or drop out of the labour force altogether.

Taken together, the impact on health and a shift in attitudes are reducing global supplies of available labour and tightening labour markets, as the OECD has observed. As I suggested was likely at the start of the pandemic, it means Covid has improved worker bargaining power.

A sustained strike wave

Increased workers’ bargaining power, a shift in people’s expectations about work, and a rise in prices providing the necessary grievance coincided to produce the surge in labour disputes we are now seeing.

But Covid’s labour market impacts are likely to be long-lasting, as economists Charles Goodhart and Manoj Pradhan explained in their 2017 paper and 2020 book, ‘The Great Demographic Reversal’. They argue that the 40-year period of very much expanded labour markets, as China and eastern Europe opened up to capital from the Global North, is coming to an end as populations age and shrink. This demographic shift will result in Labour becoming more scarce, they say, meaning we can expect it to become more powerful against capital.

Covid, then, has effectively moved us more rapidly to a point of relative labour shortage, well before the arrival of Goodhart and Pradhan’s possible “mitigating factors”, such as the full integration of India and Africa into global markets, or very widespread automation.

There are no guarantees. Strikes can be fought and lost, and heavy defeats and legal repression may all break a movement. A key economic battle this year will be over the extent and depth of the recession that rising interest rates are intended to induce, thus weakening worker bargaining power through the threat of unemployment. But there are solid reasons to think that the default setting of neoliberalism – that organised labour is always weak – is becoming a thing of the past.

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