The Government should target help at those sectors hardest hit by the coronavirus pandemic in order to avoid mass unemployment last this year, says a think tank report.
The Government should flip the Job Retention into a Job Protection Scheme, subsidising the wages of those working in those sectors hit hardest by the coronavirus pandemic to stave off an unemployment crisis, according to a report from a leading think tank.
The Resolution Foundation report also suggests raising the employer National Insurance Contributions (NICs) threshold in hard-hit sectors to incentivise keeping staff on and calls for targeted tax cuts to encourage new hiring, for instance, a NICs cut for firms that grow their workforce.
And it says publicly-funded job creation should be nationwide and focused on roles that are needed, such as social care and jobs related to retrofitting homes, and job and training guarantees for young people.
Nye Cominetti, Senior Economist at the Resolution Foundation, said: “Britain is slowly emerging from the lockdown that brought the economy to a halt and sent employment tumbling. But we are a long way off returning to business as usual, and its jobs crisis is far from over.
“A second wave of unemployment later this year, following the phasing out of the Job Retention Scheme, could leave Britain with the highest unemployment levels in a generation…The success of the Job Retention Scheme in protecting family incomes has shown why it pays to be bold with policy decisions. That same ambition is needed in the next phase of the crisis.”
The Labour party is also urging the Government to maintain support for businesses that cannot yet fully reopen amid fears of soaring unemployment when the furlough scheme comes to an end in November. And the High Pay Centre has urged firms taking taxpayer support amid the coronavirus crisis to narrow the gap between bosses’ and workers’ pay, with analysis showing that some CEOs are earning 200 times more than their average employee.
Its study looked at 107 FTSE 350 firms, with bosses at the 39 companies receiving taxpayer support taking home 60 times more than a median worker’s salary. This exceeded the average across all of the firms studied, which shows bosses earn 55 times the typical worker. The High Pay Centre estimates that across all 107 companies, cutting the top 25% of earners’ pay by 3% could give the lowest-paid staff a £2,000 pay rise, while a 5% cut would add £3,250, and 10% would boost lower-paid workers’ salaries by £6,500.