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Lots of things are not meant to happen in respectable middle class homes: feeding the kids junk food; teenage pregnancy; domestic violence. Recession is one of them. But the comfortable heartlands of south east England are about to find out that economic downturn is no respecter of social class, any more than the first three.
The 80s recession hit hardest in the industrial north and Midlands, and its victims were predominantly working class men: the sectors worst affected were manufacturing, mining and farming. This time, experts are forecasting 2 million jobless by Christmas, but the pattern will be very different. P45s will rain like confetti in London and its satellites in industries like banking, estate agency, retailing and leisure. Women, as well as men, are likely to find themselves heading for the dole office in the crunch of 2008, or to find straitened employers trying to row back on flexible working arrangements.
Some commentators, including Lord Desai, the Labour peer, believe the recession will be prolonged, but essentially shallow, and that the effect on jobs will not be too bad because the people who will be thrown out of work this time are not, in his words, "semi-skilled or manual workers", but graduates, who are capable of self-employment.
Absolute rubbish. Lord Desai's opinion is redolent of unconscious snobbery as well as unfounded optimism. I was a teenager living in the north-east in the 1980s and I know from personal experience that not everyone employed in industry then was a grimy, horny-handed manual toiler. Many who were made redundant – my own father among them – were highly skilled and well-qualified people. The problem then was not a lack of adaptability or capability on the part of the unemployed, it was lack of demand for their services. I suspect it will be the same now.
A City headhunter told me that one of his rivals had been boasting that he had 90 super-bright former investment bankers on his books. When asked what he was going to do with them, his smile evaporated and he turned white. The middle class jobless are, as Lord Desai says, capable of self-employment – though it is hugely patronising to infer that working class people are not – but that is not an easy answer. In the 1980s, there were concerted efforts to encourage people to become entrepreneurs, but small business start-ups have a high failure rate under any economic conditions. The number of distressed businesses in the UK has exploded to more than 4,500 with "critical" problems, according to corporate restructuring experts Begbies Traynor, from fewer than 800 in the same period last year. Anyone embarking on the self-employment route in the south east will be in for a struggle – and, er, how will they get the start-up capital? If a would-be entrepreneur is not lucky enough to have a large severance payment, they will find it very hard to borrow from a bank at a reasonable rate in the teeth of the credit crunch.
There are a couple of reasons why unemployment might, just might, not be as bad this time as in the 1980s, when it hit a peak of 3 million. Thirty years ago industry was dominated by trade union muscle, and employers, encouraged by Margaret Thatcher's battle against the mineworkers, seized on the recession as a chance to cut manning, boost productivity and introduce more flexible labour practices. Old-style manufacturing was, and is, under threat from cheaper emerging markets. The labour market is far more flexible now, and the pressures to keep wages high are weaker. Migrant labour was also much less of a factor back then; this time, some of the lost jobs will be accounted for by migrant workers packing their bags.
Unfortunately, even if those factors soften the blow, people don't have to be unemployed to be in financial trouble. In the 1980s, many men who had earned good pay as miners or in manufacturing jobs discovered that if they did find alternative employment, it did not pay as well – the old industrial trades were replaced by McJobs.
Thousands of employees in financial services, estate agency and the like will find it very difficult to replicate their old salary and bonus packages either in the same field or any other. Those who have geared to the hilt with extreme mortgages and credit card debt on the basis of pay deals they have no hope of attaining again will face severe difficulty, against a backdrop of house prices that are falling harder and faster in the south than the north.
Some prosperous households will be cushioned against recession by their savings, but others, perhaps the majority, will not. Household debt rose to 170% of income at the end of last year, and the savings ratio – the percentage of income set aside – is at or close to zero. Plenty of outwardly well off middle class families are in reality only one or two salary slips away from financial disaster.
It is not surprising that our deeply ingrained divisions over class and regional geography should colour our thinking about recession. The idea that real economic hardship is only for the northerners – they're gritty, they can cope – is a cultural cliche. But the notion that a southern middle class recession will somehow be nicer or less real than its working class counterpart is about as valid as John Betjeman's feeling that if the world were ending, he would want to be in the haberdashery department of that iconic middle England store, Peter Jones because surely nothing dreadful could happen there.
The north will not escape. Cities like Leeds and Manchester are heavily dependent on financial services, retail and leisure for their regeneration. They were caught up in the buy-to-let property bug, and have thousands of new build city centre flats standing empty. There is no question that they will be badly affected too, as will Edinburgh and Glasgow. Both Labour and the Conservatives placed far too much reliance on the services sector, and financial services in particular, as the engines of our economic wellbeing. No one is seriously arguing that we turn the lights back on in the factories of yesteryear, but we should direct far more energy into promoting high value manufacturing, green technology, industrial design and engineering.
The downturn in the early 90s did afflict the south, with a housing slump and small business failures, but this slump is likely to be of an entirely different order of magnitude: the National Institute Economic Review forecast this week that it will be the worst in the developed countries since 1982. There is no way that's not going to hurt.
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