The future of the left since 1884

An inclusive recovery

The economic victims of coronavirus need a job guarantee, writes Rayhan Haque.



I have been reflecting on the timeless wisdom of the late Nelson Mandela, who said: “The greatest glory in living lies not in never falling, but in rising every time we fall.” His words give me hope, that we will, eventually, overcome this sinister invisible enemy that is wreaking cruel havoc across our planet. But his inspired thoughts are a stark reminder too of our new reality and just how far we have fallen.

The economic catastrophe unleashed by the coronavirus pandemic is unlike any we have seen before, with the UN estimating a $1 trillion hit to the global economy and warning that half a billion people could be forced into poverty. It has also brought unprecedented restrictions to our personal freedoms and liberty – something that would have been unthinkable just a month ago. Everyday pleasures, like catching up with friends, playing football at the weekend, relaxing over a nice coffee and pastry, enjoying a night out on the town, and flying off to explore new places around the world, have all, momentarily at least, ceased.

We are also bearing witness to an unfolding jobs armageddon. Unemployment is rocketing, with over 1.2 million people signing up for universal credit in the last three weeks. One estimate predicts more than 6 million workers will be out of work by the end of May, with the unemployment rate climbing above 20 per cent. That will wipe out all the jobs growth seen in the last seven years.

Across the pond, economists at the Federal Reserve of St Louis project 47 million Americans will lose their job and an unemployment rate of 32.1 per cent. 16.5 million people in the US have already filed for unemployment benefits. Mass unemployment will be another global pandemic.

The great depression of the 1930s and the 2008 global recession were caused by reckless financial speculation, risk-taking, and lax regulation. They were products of a failing free market orthodoxy.

Today’s cataclysmic economic meltdown differs in a crucial respect – it has been directly instigated by policymakers world over, who pulled down the shutters on vast swathes of the mainstream economy. Industries such as travel, culture, entertainment, non-essential retail, leisure and hospitality are all closed for business.

The strategy is clear – put the economy into sleep mode and save as many lives as possible by starving the wicked covid-19 disease of the physical human interactions it feeds upon. But how will we be sleeping? We can either dream and arise fully rested and ready to take on a new day with energy, vigour, and hope. Or we can suffer from a nightmare and wake up feeling tired, anxious, and fearful of what is to come.

Once we have surpassed the peak in infections and have control of the situation, normality, ever so cautiously, can begin to resume. The economy though will require a huge wake-up call, particularly for all those suffering the nightmare of being unemployed, through no fault of their own.

The chancellor Rishi Sunak has bravely sought to ensure as many workers as possible can sleep easy and ride out the storm through his package of help for businesses, the self-employed and his flagship job retention scheme.

But not everyone benefits from this support. People who started work in March do not qualify for the furlough scheme (unless an old employer agrees to rehire them). And as the staggering numbers signing up for universal credit demonstrate, many have already been made redundant. These individuals won’t be sleeping easy over the coming weeks and months.

The chancellor has already made three big interventions to shore up the economy. However, if he is to ensure an inclusive recovery that leaves no one behind, he must return to make a fourth, and announce a job guarantee scheme, promising every worker who lost their job due to the pandemic a good job in an industry of their choice for a period of up to 12 months. This includes those who have been working as self-employed but who have now lost their livelihoods.

The job guarantee scheme would provide high-quality employment, that pays at least the real living wage or the comparable salary to a similar role, up to a maximum of £2,500 per month – which is above median earnings. The government would incentivise the creation of these placements by covering the wage costs for host organisations and supporting the recruitment of participants via a new jobs guarantee portal where all placements would be listed.

It would be an entirely voluntary scheme, for employers and individuals alike, with organisations able to apply for a wage grant (paid monthly) from the government if they demonstrate job placements are ‘additional’, offer training, and provide individuals with a guaranteed interview for any permanent roles advertised. The scheme would be open to all businesses and charities, although there should be a focus on sectors hardest hit by job losses, such as non-food retail and hospitality.

A similar, yet smaller scale jobs guarantee programme was introduced in the wake of the last global recession, and a government evaluation showed significant net benefits to participants, employers and society as a whole.

This more ambitious proposal has a very simple aim – to turbocharge a high-wage jobs-led economic recovery across the country. We simply cannot afford a repeat of the last decade, which despite record employment levels, saw a huge proliferation in low-paid precarious forms of working and the longest stagnation in wages for around 150 years.

The job guarantee scheme will not be cheap: to tackle the rapidly growing levels of unemployment will cost several billions. But the price of inaction would be far more severe, given that poverty already costs the UK £78bn every year, according to the Joseph Rowntree Foundation.

These are desperate times for the country. The chancellor said he would do “whatever it takes” to steer us through this crisis. A job guarantee, promising high-quality employment for every worker economically displaced by the pandemic, is the missing link in the treasury’s arsenal to launch a swift and inclusive economic recovery. We will rise again, as Nelson Mandela foresaw. But we must do so together, leaving no one behind.

Photo credit: Tim Dennell/Flickr

Rayhan Haque

Rayhan Haque is founder of the London Good Work Commission. He is writing in a personal capacity


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