Sheffield could see '1980's levels of unemployment' despite new Job Support Scheme

The Chancellor’s new Job Support Scheme may not prevent 1980’s levels of unemployment in Sheffield, a senior lecturer claims.

Friday, 25th September 2020, 8:56 am

Rishi Sunak said the JSS would allow employees to work part-time and get three quarters of their normal salaries for sixth months. Employers will pay staff for the hours they work. For the hours they don’t, the government and the employer will each cover one third of the lost pay.

The scheme, which starts on November 1, will replace furlough – paying people to stay at home – which in some cases is seen as sustaining jobs that no longer exist.

But Drew Woodhouse, senior economic lecturer at Sheffield Hallam University, said it would promote ‘levelling down, not levelling up’ because the government had ignored the vital need to train unemployed people who would have to find a job in an entirely new sector.

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Chancellor of the Exchequer Rishi Sunak sets outs his Winter Economy Plan to MPs in the House of Commons, London. Photo credit: PA Wire

Huge numbers of people in hospitality and retail have been furloughed or sacked and in the absence of support to upskill them they would struggle to find work, he suggested.

He added: “For Sheffield, the real concern is not primarily job losses, as this is a normal cyclical and structural feature of the Sheffield economy post 1980's, but rather the ability of the labour market to absorb these people back into work.

“Recent data shows that workers who have been furloughed come disproportionately from the lower end of the earnings distribution. Nearly one-third of workers on the lowest fifth of pay have been furloughed or lost their jobs.

“With the majority in the hospitality and retail sector, and in the absence of any support to upskill and train people that are losing their jobs, the Chancellor’s announcement neglects to help people who need to move into either related or unrelated work.

Drew Woodhouse, senior lecturer in economics at Sheffield Hallam University.

“People will drop out of the labour market, with some concerns that we will face similar pressures to those seen in the 1980's.

“Our Government again seems to ignore the value of supporting upskilling and training schemes - and this will promote levelling down, not levelling up.”

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