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Job Retention Scheme - millions of furloughed workers show why unions fought for wage protection

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Latest ONS figures show how effective the Job Retention Scheme that unions negotiated has been in protecting jobs and incomes.

Last week, we analysed new real-time data from the Office for National Statistics (ONS) on the impact coronavirus is having on our economy and society.

It showed that many workers had already experienced pay cuts, temporary lay-offs, reduced hours, and financial stress throughout March and into April.

This week’s data further supports our view that government measures to support workers and businesses through this crisis don’t go far enough.

It reflects not only the difficulties that many industries and workers are currently facing, but also how effective the Job Retention Scheme (JRS) that unions helped to negotiate has been in protecting jobs and incomes.

The Job Retention Scheme - a lifeline for workers and business

ONS data for the period covered by the survey indicates that 27 percent of the workforce has been furloughed.

Of businesses that continue to trade the furlough rate is nearly 22 per cent. For businesses that have paused or ceased trading, the rate is far higher at 82 per cent.

Given how high that is, it’s hard to imagine what would have happened to those jobs had the JRS not been in place.

Chart 1: Percentage of workforce furloughed
Graph: Percentage of workforce furloughed

How are different industries making use of the JRS?

The latest release of the Coronavirus faster indicators dataset covers the period from 23 March to 5 April.

During that period, 24 per cent of businesses ceased or paused trading, rising to 81 per cent in the accommodation and food industry and 82 per cent in the arts, entertainment and recreation industry.

Graph: current business trading status by industry, 23 March - 5 April
Chart: current business trading status by industry, 23 March - 5 April

The JRS has been a vital support to firms, and particularly those that have had to cease or pause trading.

The importance of the scheme for the accommodation and food industry (which accounts for over 1.7 million workers) could not be clearer, whether they’ve continued to trade or had to pause.

The furlough rate for accommodation and food businesses continuing to trade was twice the average rate for all industries at 47 per cent.

Chart: percentage of workforce furloughed by industry
Chart: percentage of workforce furloughed by industry

Where businesses have continued to trade, there are significant variations across industries in the proportion of the workforce working from home.

Unsurprisingly in information and communication 85 per cent of the workforce are working remotely.

The level of remote working drops significantly for industries such as accommodation and food, manufacturing and transport and storage, where the proportion of the workforce working remotely drops to between 20 and 25 per cent.

Chart: percentage of workforce working from home, by industry
Chart: percentage of workforce working from home, by industry

Workers are still facing uncertainty

So far 430,000 firms covering 3.2 million workers have applied for the Job Retention Scheme. It’s great that so many businesses are seeking support to prevent job losses, but we know workers are still facing huge uncertainties in the weeks to come.

Previous ONS data showed that many businesses were introducing short-term lay-offs before the JRS was launched in mid-March.

The latest figures indicate that the number of businesses continuing to trade and using short term layoffs across all industries has increased from 29 per cent to 40 per cent.

The number of businesses in the construction industry using short-term layoffs rose from 39 per cent to 64 per cent.

Worryingly, we know that there are high levels of self-employment in construction, with over 40 per cent of the workforce classed as self-employed.

There are over 5 million self-employed workers. Those applying for the Self Employed Income Support Scheme (SEISS) announced by the government on March 26 won’t receive grants until June and 2 million may not be eligible at all according to the Institute for Fiscal Studies .

That means many will be relying on universal credit payments that are too low and don’t arrive for five weeks.

People finances continue to be impacted with the social impacts dataset showing that over a quarter (27 per cent) of those surveyed felt their finances had already been affected, with 75 per cent seeing their income reduced and 18 per cent having to borrow to cover costs.

Chart: If affected, in what way have your household finances been affected by coronavirus in the past 7 days?
Chart: If affected, in what way have your household finances been affected by coronavirus in the past 7 days?

What do we want to happen next?

Unions helped to negotiate the JRS because we wanted to protect jobs and livelihoods. The latest ONS figures show that it’s doing that for millions of workers.

But we know the future is still very uncertain, which is why the government must do more to protect people now.

We also know that it will take all our strength to recover from this crisis in a way that protects everyone.

That is why we are calling for:

  • Measures to protect jobs and incomes to remain in place as long as is needed – and for the JRS to cover short-time working.
  • An increase in the basic rate of universal credit to £260 a week (80 per cent of the average weekly wage at a living wage rate).
  • An increase in the weekly level of statutory sick pay from £94.25 to the equivalent of a week’s pay at the real living wage, as well as the abolition of the lower earnings limit.
  • A tripartite approach to the recovery, bringing together unions, government and businesses.
  • Every worker to get the PPE they need to do their job safely.
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