The real cost of recession

Tuesday 12th January 2010, 3:00PM GMT.

IT is all very well to talk about recession in abstract terms, looking perhaps at statistics relating to States income or the Island’s overall economic performance. The full reality of what recessionary times mean, however, emerges only when businesses falter or fail, jobs are lost and economic abstraction collides with ordinary people’s lives.

There is no suggestion that either Jersey Telecom or Jersey Post, two public sector organisations which are also very much part of the commercial world, are failing.

That said, they are both having to look seriously at the nature of their operations not only because of present conditions but also because they must respond to changes in the technologies and practices that underpin their activities. As a consequence of restructuring, each organisation intends to shed 80 jobs.

By Island standards, this amounts to mass redundancy – though in both cases steps will be taken to soften the blow through inviting employees to leave voluntarily in exchange for suitable compensatory packages.

In spite of this, the landscape for anyone finding himself or herself out of work in the immediate future can only be described as bleak. The latest unemployment figures – which were published at the end of November – showed that 1,089 Islanders were registered at Social Security’s Job Centre and were actively looking for work. This figure, moreover, is likely to have understated the total numbers out of work because senior employees who see little point in entering the general jobs market make their own arrangements to find new positions.

It is now true that an Income Support scheme is in place to offer those in need some protection from hardship, though few in receipt of benefits are likely to see state provision as any real alternative to a job and the sense of dignity which goes with employment. It is also the case that benefits will always represent a drain on public funds and therefore play very little part in countering recessionary trends.

Vital though the Income Support safety net undoubtedly is, the corner leading to more favourable conditions will be turned thanks to economic factors beyond our control plus the prudent actions of government here at home. The pumps are already being primed with some of the £44 million earmarked to stimulate the economy. If jobs to replace those that are now on the line are to be created, this spending must clearly continue.