The title of what Chancellor Rishi Sunak announced yesterday, ‘Job Support Scheme’, flatters to deceive. The key thing to be aware of is that employers are being asked to pay one-third of the topping up of a worker’s wage who has been moved from full-time to part-time hours, which many of them are not going to be willing to do since they will be paying them not to be at work. Perversely, there is actually a financial detriment for bosses to move to shorter-time work through this scheme.
“For example, under this approach it would cost an employer 33 per cent more to employ two people half-time on the Job Support Scheme than it would to employ one person full-time (at an assumed salary of £17,000 a year),” the Resolution Foundation finds.
It gets a bit more complex than that, because running alongside this scheme is the £1,000 Job Retention Bonus, so there will be a lot of companies getting their calculator’s out to determine whether the Bonus subsidy is of a greater value than what is lost from going down the Job Support Scheme route. But the Job Retention Bonus ends at the end of January, while the Job Support Scheme runs until April, so that calculation is only relevant for three short months. Plus, employers don’t have to place workers in the Job Support Scheme: they could cut their hours, take the Bonus, and not bother with the Scheme at all because it adds to their costs. Take-up of JSS is not going to be anything like Furlough, it’s not even in the same league.
It’s impossible to interpret what Sunak is up to as anything other than cynical. With a second wave emerging, he wants to appear to be continuing to offer serious financial protection to save jobs, while in practise knowing full well that he is easing workers towards the cold, hard reality of redundancy. We perhaps underestimated the Chancellor’s Schumpeterian instincts on Source Direct yesterday: the scheme being closed off to “non-viable jobs” suggests the Treasury is indeed thinking now is the time to pressure many workers to look elsewhere for work, without actually creating those new job opportunities through massive public works schemes which are yet to appear.
The real kick in the teeth is that there was no long-term increase in Universal Credit announced yesterday. The ‘Coronavirus boost’ to welfare payments is still coming to an end in April next year. So for a single person aged 25 or over, the standard amount they are getting now a month is a measly £409.89, but that will fall next April to just £323.33. This is the nasty party at work.
Already, the Next boss, Lord Wolfson, is out of the traps, mimicking the government’s language: hundreds of thousands of retail jobs are “unviable”, he said.
“I wouldn’t want to underestimate the difficulty that is going to cause a lot of people who work in retail, I think it’s going to be very uncomfortable,” he added.
Yeah, but not uncomfortable for you, Lord Wolfson. This is what asymmetric class war looks like: politicians and business leaders line up to tell low-income workers that unemployment and poverty are inevitable, and in lieu of any co-ordinated resistance and alternative offered by the other side, it looks like common sense. But of course Next and other corporate giants are still getting hand-outs: 60 per cent of firms which got dirt-cheap loans through the Bank of England’s Corporate Covid Financing Facility have laid off workers since the crisis began, while continuing to pay out dividends to shareholders.
Mass unemployment is not inevitable. Jobs can be created to replace retail work, ones that are more socially useful. Whatever big numbers they throw out about the size of public debt, the government still has plenty of financial fire-power to create jobs if it wanted to use it. Sunak has decided not to: he’s made an active choice to swell the dole queues.
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