What difference would further recession mean to working people, the cost of living for a majority is already reaching tipping point. Conventional wisdom dictates that a growing economy has wider public benefit, but it is simply a slightly different take on trickle down economics, in that the economic system might be looking good but everyday working people don't see much, if any of that benefit, the benefits go to the very wealthy and major corporations, who still push and need low wages and insecure jobs for a large proportion of workers, in order to maintain a growing economy.
Constantly pursuing economic growth without any underlying goal, such as full employment or full economic participation might be and quite probably is the principle problem, particularly in an economy that is driven by consumptive activity, where every year since the mid eighties just under 1% of the working population are taken out of the disposable income consumptive brackets and into only needs based consumption. over the last couple of years that 1% is thought to have to be around 2 to 3% per annum, with increased energy and food prices and landlords gouging tenants that 2 or 3% might be wildly understated.
The "growing economy" of the 90's left a huge proportion of the population with either barely sustainable debt or a complete inability to live according to the model of the economy that is being promoted, protected or managed by industrialised western governments, ie low interest, low inflation, low tax, growth based. The interconnectivity between inflation, interest rates and growth models just isn't there in the way that conventional economics tells us. The BoE's role is to protect maintaining monetary and financial stability, and the way they do this is low inflation. The fed is the same (more or less) as is the CEB.
In order to maintain low inflation rates (and hence low interest) there is a specific need in the current econ models for unemployment to be between 4 and 6%, which means that around a third of all workers have to be in generally low paid and more importantly insecure jobs to suppress wages, which specifically reduces overall consumptive capability, which for the last 40 plus years has been mitigated by artificially low interest rates, and high risk consumer lending, where everything form mortgages to auto loans to sub-prime credit cards become part of financial instruments in the investment sector and are considered through mathematical magic to be low risk, that risk is also moved away from the individual banks to the overall financial system, the taxpayer because the basic risk assessments are (deliberately and knowingly) flawed.
The economy falling by 0.3% is largely meaningless in the same way that if it was growing at 1%. The measurement itself is meaningless because it has no consideration to any wider economic goal. However I will admit that economic drops and their typical remedies will always fall on the working population, so its not good news, if there is any recovery, 99% of the benefits go to capital. Some of the basic ideas of economics need to change and I'm of the opinion (having listened and read far more qualified people) that economic shrinkage might be needed, but as yet I've not seen a model that doesn't disproportionately hit working people and labour in general.
The economy grows working working people get screwed; the economy shrinks working people get screwed.
