By Seema Malhotra
Labour MP for Feltham and Heston
Shadow minister for work and pensions and employment
AS WE emerge from lockdown into a new “normal”, a clear plan for tackling unemployment has to be on the government’s agenda, based on a proper needs assessment of different groups.
The first step has to be a ‘back to work budget’ in July, with a focus on jobs, jobs, jobs. One size will not fit all, with figures showing our country is faced with a deeply unequal employment challenge.
Three million people have applied for universal credit since the start of March and the OECD [Organisation for Economic Co-operation and Development] has warned we are likely to face the deepest economic scarring of any recession in peacetime for the last 100 years. Behind these country-wide figures, unemployment is hitting different sectors, places, demographics hard.
London and the northeast, followed by the West Midlands and the northwest, showed the highest number unemployed by region in the latest Office for National Statistics (ONS) data in May. The West Midlands, with its deep industrial base, is forecast to experience the sharpest fall in GVA [gross value added] in 2020 of any region. Meanwhile, the northeast is projected to have the poorest economic growth over the period to 2025, with unemployment at the end of this period forecast to be the highest in the country.
Young workers, low-paid workers, BAME workers and women are also more likely to have been hit by job losses or reduced income. Under 35s accounted for 47 per cent of those unemployed in May 2020. Nuffield research shows just over a quarter of temporary workers said they were now “definitely” or “probably” unemployed because of the pandemic, compared with four per cent of permanent, salaried employees. For the self-employed, many of whom work in the gig economy, 75 per cent reported that they earned less than usual, compared to 26 per cent of permanent salaried employees.
This crisis has also had a disproportionate impact on those from ethnic minority backgrounds – a double hit on BAME communities which, a recent Public Health England report has concluded, are more likely to be diagnosed with Covid-19 and more likely to die from it.
A BMG poll in April found that approximately 46 per cent of BAME people reported their household income had reduced as a result of coronavirus, compared to around 28 per cent of white British households, while 15 per cent reported they had lost their jobs compared to eight per cent of white Britons.
IFS analysis has also shown that Bangladeshi men are four times as likely as white British men to have jobs in shut-down industries; Pakistani men are nearly three times as likely; and black African and black Caribbean men are both 50 per cent more likely than white British men.
New government figures in June have shown my constituency of Feltham and Heston has seen the fourth-largest number of furloughed employments in the country, only just behind West Ham, Tottenham and East Ham and closely followed by Brent Central. All have high BAME populations.
There is also a significant gender impact too. Women’s Budget Group analysis shows women are over-represented among workers most impacted, making up 69 per cent of low earners, 54 per cent of temporary employees, 54 per cent of workers on zero-hours contracts, and 59 per cent of those in part-time self-employment.
With the unequal impact this crisis has had on the employment of different groups of workers, one thing is certain – a one-size-fits-all approach to tackling this unemployment crisis will deepen the inequalities we face, and harden the structural inequalities that Covid-19 has exposed. This crisis has also inverted previous biases about jobs, with those deemed low-skilled now at the heart of our economic functioning.
Our national focus on saving lives must now evolve into a national purpose to save lives and livelihoods, and to ensure steps are put in place for an inclusive recovery. While we move forward with uncertainty, we can and must draw on what we know works and adapt interventions with local knowledge to the crisis we face. This means applying lessons learned, for example, from the success of Labour’s Future Jobs Fund, as well as employment and enterprise schemes in the years before.
The government was slow off the mark in understanding the scale of this pandemic and then in its response to the crisis. Companies acting responsibly have an important part to play. The government needs to actively plan now with industry, devolved administrations, communities and unions, building on what we know about how this crisis is affecting employment by sector, place, and demographics. If there is one thing this crisis has taught us, it is the importance of being ahead of the curve.