Up to 5.6 million workers are at high risk of losing their jobs or hours and being unable to access the support they need, according to new analysis published by the New Economics Foundation
Within this number, 1.6 million workers are at especially higher risk as they work in industries that have been directly affected by the government shutdown, such as restaurants and non-food retail shops.
The analysis looked at the number of people who are at especially high risk of missing out on the government’s ‘job retention’ and ‘self-employed income protection’ schemes.
Employees that are likely to miss out from the job retention scheme include those that see a cut in hours, or who are made redundant rather than being furloughed. The self-employed income protection scheme will miss the newly self-employed, as well as those that are incorporated as companies. But even those self-employed who will be eligible will not receive any support until June 2020.
All workers that meet one of the following characteristics are at high risk of missing out on new government protections: fixed-term contracts, zero-hours contracts, those who were already underemployed by their employer and the self-employed.
Based on analysis of the Labour Force Survey, NEF economists identified all workers that fitted these characteristics prior to the economy lockdown. The analysis showed that outside the public sector and occupations identified as ‘key’ by government, there were 5.6 million workers in insecure employment. Within this number, 1.6 million worked in industries that were directly affected by the government’s lock down.
Many of these vulnerable workers are likely to be among the 1 million people who applied for Universal Credit during the last two weeks of March. But even those workers who are able to access support via the UC system will likely have to wait many weeks, if not months, to receive their full payment. This will cause severe financial hardship for those who have lost work as a result of social distancing measures and are trying to do the right thing.
Christian Jaccarini , Economist at the New Economics Foundation, said:
“This crisis is exposing the precarious situation faced by millions of people who, even before the virus-induced economic shock, were experiencing low pay and job insecurity. And so, in turn, it is exposing critical gaps in the UK’s welfare safety net. What is clear is that you cannot rebuild in a week when you’ve spent a decade destroying – our social security system is not fit for purpose in this crisis and will not be for the next. We urgently need a safety net that allows people to access the support they need for the basics in life whether in a global crisis or a personal one.”
