Job Creation Is the New Game in Town
Even if a successful rollout of a new COVID-19 vaccine causes the current health crisis to recede by next spring, the unemployment crisis will remain. That is especially true in the United Kingdom, where fiscal stimulus is urgently needed to avert a lost decade – if not a lost generation – of growth.
EDINBURGH/LONDON – In the wake of the COVID-19 pandemic, both the US and European economies are gearing up for large-scale job creation. US President-elect Joe Biden has pledged to invest $700 billion in manufacturing and innovation, plus $2 trillion in a “Biden Green Deal” to combat climate change and promote clean energy. Meanwhile, Germany has abandoned years of thrift by backing a €750 billion ($887 billion) European Union recovery fund and, like France, will maintain its own national job retention and job creation program throughout 2021.
By contrast, the United Kingdom’s chancellor of the exchequer, Rishi Sunak, has fallen behind the curve. Back in March, many expected that Britain would experience a V-shaped recovery. As this prospect faded, it became clear that Sunak’s rescue operation needed to be matched with a viable recovery plan.
The consensus view is that both the UK and the global economy will be smaller in 2021 than they were in 2019. The International Monetary Fund predicts that the global economy will be 6.5% smaller than was forecast before the COVID-19 crisis, with a legacy of unemployment at least double the pre-pandemic norm.