Targeted continuation of Job Retention Scheme needed to prevent surge in unemployment in ‘close contact’ job sectors, says JRF

Hospitality and retail sectors among those that should benefit from a new COVID-19 furlough scheme to help protect jobs while dealing with reduced capacity and demand due to social distancing measures

A temporary and targeted furlough scheme to support job sectors which are reliant on close contact with the public is essential to prevent a surge in unemployment as the Coronavirus Job Retention Scheme (CJRS) is unwound at the end of October, the Joseph Rowntree Foundation (JRF) has said.

A new ‘Pre-Vaccine Jobs Risk Index’ from the JRF highlights that, among job sectors outside the spheres of health, care or essential services, those likely to be hit hardest by coronavirus until a vaccine is found include hospitality, retail and beauty, as they rely on close contact with members of the public.

The JRF warns that people who are already at risk of poverty, including those working in 'close contact' job sectors, face a higher risk of unemployment as a result of the pandemic, as shown by key findings from its research including that -

• around 40 per cent of employees on the minimum wage face a high or very high risk of having their job destroyed by coronavirus (COVID-19) compared to less than 1 per cent of those earning more than £41,500 per year;
• the expected surge in unemployment is likely to hit groups such as young workers, women, some disabled people, and people from Pakistani and Bangladeshi communities, many of whom were already at an increased risk from the virus itself; and
• workers in the least productive tenth of local economies face the highest risk of losing their jobs at 13.5 per cent compared to a 10.5 per cent risk in the most productive tenth of local economies.

As a result, the JRF recommends that the government introduces a ‘COVID-19 Job Support Scheme’ to temporarily target furlough policy measures at businesses that continue to face constrained capacity and reduced demand due to required social distancing measures. It also calls for a package of measures to create new job opportunities and deliver a ‘good jobs’ recovery at the autumn Spending Review.

Commenting on the need for ongoing furlough support, Head of Economics at the JRF Dave Innes said -

‘The government’s furlough scheme was bold, ambitious and necessary, and has kept many working families afloat during lockdown and beyond. Many workers who were already at risk of being swept into poverty may be especially vulnerable over the coming months.

The government faces tough choices about how to best support businesses to protect jobs and create new ones. But now is not the time to be withdrawing support for businesses who are still feeling the effects of social distancing.

By introducing a targeted, temporary scheme for workers in the most at-risk sectors, a rise in unemployment caused by the virus and recession can be prevented from becoming an overwhelming wave of hardship. It’s not right in a just and compassionate society that the impact of the looming recession could be felt especially hard by young workers, women and people from some Black, Asin and Minority Ethnic backgrounds.

By keeping these sectors afloat in the short term and ensuring that good jobs are created, at-risk workers can ensure that they build on their skills and get the support they need for the new economy that must emerge after this phase of the pandemic.’

For more information, see Targeted furlough scheme needed as new research shows who is likely to lose their job from the JRF website.