Kate Bell on how unions pushed the Tories on furlough scheme but stop-start short-termism is creating unnecessary redundancies, especially among Black workers
Record labour shortages”… “hospitality hiring crisis”… “pay rise for lorry drivers”. Anyone glancing at the news in summer 2021 might think that the economic impact of the coronavirus pandemic had been a welcome shift in workers’ bargaining power. But behind the headlines lie significant challenges for workers. There’s a long way to go before workers’ prospects recover even to their pre-pandemic levels – and even further before we deliver the changes we need to ensure everyone has the chance of decent work.
We should start with what is good news: it’s clear that the furlough scheme, negotiated by unions, has helped protect jobs. In May 2020, the Bank of England thought unemployment could rise to 9 per cent. They now think that the peak will be at the current level of 4.7 per cent – still far too high – but representing over a million fewer people out of work than predicted, and representing a big success for the job retention schemes. Eleven million people were supported by the scheme for employees, and around 2.9 million people claimed the self-employed income support grant.
The TUC pushed for the scheme to be extended in September 2020 – at a time when the Treasury was arguing it was no longer necessary. Eventually the scheme was extended three more times – with this stop-start approach leading to uncertainty and redundancies. That’s one of the reasons the TUC is now calling for a permanent short-time work scheme to be put in place to deal with industrial disruption in the future. Because although we all hope the worst of this pandemic is behind us, we know there will be future episodes of economic change, driven by technology, the necessity of responding to runaway climate change, and future financial instability. Our proposals build on the evidence both from the UK and across Europe that government action to protect jobs delivers results.
But the success of furlough shouldn’t blind us to the very real increase in unemployment, and the disproportionate impact it’s had on Black workers. Around 200,000 more people are now unemployed than before the pandemic, and there are a corresponding 200,000 fewer people on payrolls. These job losses have hit BME workers hardest, reflecting the structural racism endemic in the UK job market. Already high BME unemployment rates have risen, from 6.1 per cent to 8 per cent in the year since the pandemic hit. That’s an increase three times faster than that for white workers – for whom unemployment rose from 3.6 to 4 per cent.
Those unemployment figures could get significantly worse if the government goes ahead with its plan to end furlough at the end of September. While the numbers of people supported by the scheme are falling, the latest official figures show there were still 1.9 million people on furlough at the end of June – many of whom could also face losing their jobs without further support. Alongside putting in place a short-time work scheme to protect work in companies that can bounce back, the government should be investing to create the new jobs we need – in our hard stretched public services, and in the green industries of the future.
Stopping unemployment is important but there’s far more to do to make work better. The coronavirus pandemic has exposed the reality of insecure work in the UK.
Care workers, delivery drivers and shopworkers played a crucial role in keeping society going. But too many of these workers face unacceptable working conditions, with zero hours contracts, false self-employment and insecure agency work rife in some of the jobs we relied on most to keep us safe.
There are now 3.6 million people in insecure work in the UK – and there’s no sign that the promises to them to ‘build back better’ are bearing fruit. The government shelved its long-promised Employment Bill and won’t even deliver an increase in sick pay to the two million workers currently missing out because they earn too little. And with a £20 cut to Universal Credit planned for October that will hit over two million low-paid working families, the government is adding insult to injury.
The continued refusal of the government to act on employers’ attempts to push down workers’ terms and conditions through insecure work and fire-and-rehire is one reason that headlines around ‘boom times for workers’ should be taken with a pinch of salt. But there’s one positive sign that workers’ bargaining power has been boosted: the increase in trade union membership. Between 2019 and 2020 trade union membership increased by 100,000 – the fourth consecutive year of growth. With union density at just 23 per cent, here too, there’s a long way to go. But if we want to deliver decent work, and to build back better for everyone, we know that trade unions and collective bargaining are our best hope.