New TUC report sets out plans for a scheme to avoid high unemployment and to benefit Britain's communities
The TUC is today (Monday) calling on the government to provide a Job Guarantee Scheme as part of the national recovery plan for the economy and people’s living standards.
In a new report, the TUC outlines the details of a scheme that would help prevent the pandemic being followed by a major unemployment crisis and prolonged recession.
It would have similarities to the Future Jobs Fund, which was part of the national recovery plan following the recession in 2008 caused by the private banking crisis. A government evaluation found a net benefit of more than £7,000 per participant.
The jobs created by the scheme would have to meet key requirements:
Transition from the Job Retention Scheme
The Job Retention Scheme must continue throughout lockdown. It must be flexible at the end of lockdown, to allow short-working while people transition back to normal hours. And it must be extended beyond lockdown for high-risk groups who must remain in social isolation for longer.
But the TUC says that with people already losing jobs, especially in sectors such as hospitality, entertainment and retail, support is also needed for the growing numbers of unemployed workers.
The Job Guarantee Scheme will prevent these workers getting caught in long-term unemployment. And it will help the nation by providing socially valuable work as part of the UK recovery plan.
Supporting young workers
The hardest hit employment sectors also have high rates of young workers.
The recession caused by the private banking crisis in 2008 particularly harmed the employment prospects of young workers. The unemployment rate for 18 to 24-year olds reached a much higher peak than for other age groups.
Long periods of unemployment for young workers are associated with a higher risk of further periods of unemployment, lower-skilled work and lower-paid work throughout the rest of their working lives.
For these reasons, younger workers should get early access to the scheme after 3 months, compared to 6 months for other workers. And they should have guaranteed training.
TUC General Secretary Frances O’Grady said:
“The TUC is proposing a new plan for jobs to make sure everyone has work as we come out of lockdown. Ministers must stop the coronavirus crisis turning into an employment crisis.
“The job retention scheme has done tremendous good by keeping people in work. But it must not end abruptly at a cliff-edge. The government must make it more flexible to support a phased return to work.
“And for those who have lost their jobs, the government should bring in a Job Guarantee Scheme to bridge workers through the tough period ahead. That’s how to start building back better, with jobs for everyone, fairer work and a greener economy.”
- Job Guarantees Report: The full report ‘ A new plan for jobs - why we need a new jobs guarantee’ can be found here: https://www.tuc.org.uk/sites/default/files/2020-05/JobsGuaranteeReport.pdf
- Net benefits from the Future Jobs Fund (FJF): DWP’s evaluation of FJF in 2012 showed that overall, the programme was associated with net benefits to the employer (£6,850) and the participant (£4,000). The cost to the Exchequer per participant was £3,100, so the net benefit to society was £7,750 per participant. Two years after starting in the scheme, participants were 16% less likely to need welfare support, and 27% more likely to be in unsubsidised employment.
- Impact on young workers: Analysis by the Institute for Fiscal Studies shows that employees under 25 are about two and a half times as likely as other workers to work in a sector that is currently shut down. https://www.ifs.org.uk/uploads/BN278-Sector-shutdowns-during-the-coronavirus-crisis.pdf
- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.
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