The biggest challenge that has been exposed is the gap in security of income between the salaried and low-skilled hourly workers. Sectors with most hourly workers experienced the sharpest drop in hours and wages last April according to the ONS – i.e. hospitality (55% hours fall, 18% earnings fall) and construction (28% hours fall, 8% earnings fall).
Salaried workers – professionals, public sector workers, and those in stable secure work – had steady access to income whether they worked from home or were furloughed. Hourly workers – small service dependent businesses, contractors, those juggling multiple jobs – were already more likely to earn less and be part-time than salaried workers, were most exposed to the health and economic risks Covid-19 posed. They were also more likely to be furloughed, or not be eligible for furlough and therefore the most difficult group for the government to support.
The salaried could sleep easy, the hourly workers could not know where next month‚’s income would come from. It‚’s not a surprise that a greater proportion of adults with low household income – disproportionately hourly workers – reported symptoms of anxiety and depression last year. Economic and technological change from the intangible economy, ‚’gig‚’ and flexible working, automation all pose to cause further uncertainty. Hourly workers are more likely to be working in the gig economy, be low-paid and ‚’stuck‚’ (not expect upward progression), and be vulnerable to automation.
As government support mechanisms unwind, hourly workers will need to rely on an unprecedented spending boom by the salaried workers for their goods and services, which is likely to be uneven if it even comes. We should use income taxes to increase universal credit to level up the playing field. Tax me more to ensure the delivery people who helped me sleep in 2020 sleep