World News – GB – « Sleepwalking in Mass Unemployment »: How Workers Cope as Leave Program Ends


Wage support is cut just when it may be needed most – when delays and U-turns have already cost jobs, writes Ben Chapman

It’s like there’s no one to turn to, ”says Ian McGivern, a 42-year-old dental technician who was fired a fortnight ago. After more than two decades in the industry since his release from school, he did not expect to be unemployed

« My expenses for my house are numerous and I have nothing to bring in », he said « I don’t know how they expect us to survive »

As the end of the leave program approached on October 31, and with few patients walking through the dentists’ doors, his employer decided to let him go This is the first time in his life that he has been unemployed; the first time he has considered the prospect of not being able to support his family financially, even to keep a roof over his head

It’s an experience many more could face this winter, as the number of Covid-19 cases rises, while government financial support is cut

Some 450,000 people are expected to lose their jobs because, thanks to the less generous support that comes from Sunday, their employers will not be able to keep them

The Trade Union Congress warns the UK to ‘doze off to mass unemployment and poverty’ unless the government provides more help, while analysts at Oxford Economics say only an extension of the leave may prevent major wave of unemployment as second national lockout trades

For McGivern, this wave has already struck and he, like many others, has recently discovered the harsh reality of Britain’s safety net

In the next few months, I will be forced to sell my house, because of a government that made mistakes

While tenants can claim housing allowance, people with a mortgage to pay must be out of work for nine months before the state contributes to housing costs – and even then, it will only provide  » a loan to cover interest, not repayment Universal credit can be as low as £ 409 89 per month

« In the next few months, I will be forced to sell my house, because of a government that has made mistakes, as I see it There will be so many people who will have to sell, in situations like mine Says McGivern

Years of welfare cuts motivated by the rhetoric of austerity, belt-tightening and disheartening « dependency » have left a system struggling to meet a central goal: to help people get through an unforeseen emergency

Basic unemployment benefits for a single person replace a much lower percentage of lost income than in many other European countries Statutory sickness benefit is the lowest in the OECD (Organization for Cooperation and economic development)

McGivern leaned into learning to be a plumbing and electrician, but he would only be paid £ 170 a week, which is nowhere near enough to cover the bills So the next hope is to take a driving instructor’s course It will take at least six months before he is qualified Meanwhile, he tries to find odd jobs here and there « I feel like I was forced to do this », he says « I try to be very optimistic »

His situation highlights a problem with the government’s stammering approach to employment support No one could say his job is not among the “viable” jobs Rishi Sunak has said he wants to preserve Covid will not lead to the downfall of British dentistry

Yet he is unemployed, in part because of a government that kept an eye on the budget deficit rather than the immediate economic disaster

As France and Germany extended their wage support regimes for 24 months, bringing certainty to businesses and workers, the UK’s ‘whatever it takes’ message of the start of the pandemic was replaced by a series of concessions reluctant to the severity of the crisis situation

Worried about the cost of continuing the leave program, Sunak has steadfastly refused to bring in a replacement As recently as last month Boris Johnson told the House of Commons that those on leave were « languishing without work » and had to return once the program ended

Soon after, his chancellor announced the employment support program, which drastically reduced the aid available to employers and prompted them to cut jobs rather than keep workers with reduced hours

After weeks of warnings that the flawed design of the JSS would lead to a tsunami of layoffs, the Chancellor gave in to calls for more generous support just days before the October 31 deadline It was too late for the thousands of people who had already been released

« The main driver of reforms now in the UK seems to be ‘how can the state save money’? » says Torsten Muller, director of the European Trade Union Institute, which has analyzed wage support regimes across Europe

Part of the UK’s problem is that it doesn’t have much history of supporting workers’ incomes during crises When the National Audit Office compared leave with other similar programs, it found that the UK was the only one out of 20 countries that did not already have a mechanism of state wage subsidies in place

“In countries with an older tradition of this kind of support, like Germany, Austria, Sweden and others, the state sees the benefits,” says Muller “It’s a very important stabilizer of the economy, which supports demand « 

The economic logic is simple: in a severe recession the last thing you want to do is take money out of people’s pockets Every person who sees a big impact on their income is one less customer for business who are desperately trying to stay afloat

Muller adds: « In the short term the government might save money, but in the long term it will cost a lot more if you don’t fully engage in these kinds of projects. »

Reluctantly or not, from 1 November the government will pay two-thirds of wages up to £ 2083 per month per employee for businesses forced to close under lockdown rules Affected businesses can also apply grants of £ 3,000 per month

Companies allowed to remain open must pay workers at least 20% of their wages to qualify for government assistance, with the government paying 62% for hours without work up to a maximum of £ 1,54175 per month

The second category is where unions fear that many workers will lose their jobs. “Many companies will be directly affected by the closures, even if they have not locked the door,” says Tim Sharp, head of labor rights at TUC « We are concerned about places like local breweries where pubs have closed, laundry services for hotels, caterers »

Self-employed people can only claim 40% of their previous income Then there are up to 29 million people, mostly self-employed or entrepreneurs, who have been denied support throughout pandemic because they did not meet government criteria

Ian Fozard runs the Roosters Brewery in Harrogate, which sells to local retailers and pubs, many of whom are now subject to Level 3 restrictions. He has a favorable view of the employment assistance scheme « There is a great understanding and acceptance of the situation within our team « , he says

« We tried to spread the pain to all staff But the overall economic situation and the inability to control the virus are a big concern Sales halved between September and October

« There is just concern throughout the industry People are not buying beer in the volumes they used to be There are a lot of pubs that buy good beer are the ones that can’t or cannot sell food « He thinks that public money given to big companies could have been better distributed

« Tesco got £ 585million cut in business rates Small brewers got nothing even though hospitality shutdown affects us directly »

As job losses increase and incomes decline, pressure increases on the government to be more ambitious with its stimulus package All eyes are on Rishi Sunak’s spending announcement on next month, in which he pledged to deliver a ‘Jobs plan’ and set a vision for long-term investment in schools, the NHS and infrastructure

Boris Johnson drew ridicule in June when he unveiled a stimulus package made up largely of previously announced projects, then called for comparisons to Franklin D’s New Deal Roosevelt

If ever there was a time for a truly Rooseveltian vision, it must surely be now

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World news – GB – ‘Sleepwalking and mass unemployment’: how workers struggle as leave program ends



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