A third of the Scottish workforce will either be on furlough or made unemployed by the end of June just as the Tory chancellor considers reducing support for the government job retention scheme.
Shocking new research shows that 750,000 people in Scotland could be enrolled onto the “Jobs Retention Scheme” this quarter, and a further 150,000 jobs could be lost as a result of the Covid-19 crisis.
This would amount to 900,000 people, or one in three of workers in Scotland.
The analysis by the IPPR Scotland think-tank warns that retail, the motor trade, hospitality and construction will be slammed in the economic crisis caused by coronavirus.
Although all sectors have been affected by the economic element of the crisis, some will be more seriously exposed to its effect than others, the new report warns.
The independent public policy think tank used official projections along with available labour market data in Scotland to estimate the impacts of coronavirus on different sectors.
The researchers found:
- In Retail, wholesale and motor-trade, Scotland’s largest employment sector outside of health services, 140,000 workers could placed on furlough and 30,000 job lost. That would account for 49 per cent of all jobs in the sector.
- In accommodation and food services 140,000 workers are projected to be furloughed and 30,000 job lost, a devastating 83 per cent of all jobs in the sector.
- The construction industry in Scotland, currently at a standstill while work continues in England, could see 80,000 workers furloughed, and 20,000 job losses, totalling 69 per cent of all jobs in the sector.
Russell Gunson, director of IPPR Scotland, said: “The Covid-19 pandemic is a public health crisis but without question this research shows it is an economic crisis too. The pandemic is affecting us all, but some people will undoubtedly be more affected than others by the economic impact of this crisis.”
In addition an IPPR survey of people working in the sectors with the most job losses were more likely to be+ already struggling financially before the crisis kicked in.
It found 29 per cent of workers in retail, wholesale and motor-trades say they are “just about getting by” or worse financially.
Similarly, 32 per cent of workers in construction and one in three workers in Scotland’s accommodation and food sector said they were in the same situation.
IPPR Scotland warned the analysis shows those families who faced financial insecurity prior to this crisis are at the sharp end of the economic consequences of coronavirus.
The shock survey adds fears of a massive wave of job losses when the Government begins winding down its wage bail-out for millions of virus crisis hit workers.
Chancellor Rishi Sunak has tried to reassure the more than six million people whose jobs rely on the scheme that there will not be a “cliff edge” end to it.
The Job Retention Scheme is currently due to run until June 30.
The Treasury is considering “tapering” back the current 80 per cent of workers’ wages paid by the state, initially to 60 per cent with further small reductions to follow, meaning that people would become worse off over time on the scheme.
With taxpayers now meeting the wages of 6.3 million people whose jobs were shut down by coronavirus the cost has ballooned to £8 billion.
Key decisions are due to be taken at the Treasury this week, ahead of Boris Johnson’s expected announcement on Sunday of the Government’s plan to ease Britain out of economic and social shutdown.
