Universal Jobs Guarantee: Is it time for an ‘employer of last resort’?

The Government’s attempt to halt the spread of coronavirus has shut down entire sectors of the economy, causing unprecedented disruption to people’s lives and livelihoods. The most recent unemployment rate is 4.5 per cent, according to the Office for National Statistics, meaning that 1.5 million people are out of work. These figures are only likely to increase, and the Bank of England has said we may face the deepest recession in 300 years.

While there has been considerable effort to restrict and control the inevitable fallout from a country in lockdown, whether it be the Job Retention Scheme or the various support packages included within the Winter Economy Plan, there is concern that such interventions merely patch up the economy – rather than identifying policies for the longer term.

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Support has so far been released in the form of smaller, targeted packages, meaning some people – such as the self-employed – have been left to fall through the cracks. It is only with the announcement of a new national lockdown that the Chancellor has extended support to the self-employed.

But a more radical policy proposal that covers everyone may exist in the form of a Universal Jobs Guarantee, a social security policy whereby the Government commits to providing secure, decently paid employment to anyone who wants it.

The central objective of a Universal Jobs Guarantee is simple: to minimise unemployment as much as possible. In practice, a Jobs Guarantee means the state acts as an ‘employer of last resort’ to provide new sources of work for those laid off in the private sector when others cannot.

For example, during the Great Depression, US President Franklin D. Roosevelt introduced a nation-wide programme to employ people to carry out work on public infrastructure projects. This gave 8.5 million American workers social stability while also stimulating economic recovery.

And in the UK, after the financial crisis, the Future Jobs Fund was introduced to create jobs, training, or work experience for all young jobseekers, providing support to those aged 18 to 24 that were struggling in the job market. 

The announcement of the Kickstart scheme is welcome and needed – the @SMFthinktank called for a universal job scheme back in May

See the paper from myself and @jake_sheps
https://t.co/izbcXhpgA0 https://t.co/V9uOg7UhSx

— Kathryn Petrie (@PetrieKathryn) July 8, 2020

More recently, the former Prime Minister, Gordon Brown, has advocated the guarantee of work, training, and education as a means of protecting jobs during the current crisis.

Research from the Social Market Foundation, where I work, has showed that, as well as reducing immediate unemployment, a job guarantee scheme would also limit the longer-term ‘scarring’ effects of the impending recession. 

Economic inactivity can equate to missed opportunities for upskilling and in-work progression – and so many people, unless provided with workplace training, are likely to be left behind after the crisis. We have found that some regions in the UK may still be recovering from the financial crisis because of such scarring.

In terms of delivery, there are many ways a Universal Job Guarantee could effectively be used to support the UK’s economic recovery. Developing the green economy and filling the low-carbon skills gap offer particularly promising opportunities. 

Currently, the UK is off-track to meeting its Net Zero 2050 target, and therefore a programme that provides hundreds of thousands of jobs and training roles would provide a much-needed boost to the country’s decarbonisation efforts. One such solution might be to place Job Guarantee workers with employers that develop, build, supply, and install low-carbon heating systems.

This is but one possible route for change. But in order to reduce the scarring effect of joblessness and to support the long-term vitality of the labour force, the current crisis should be used to reimagine employment support in the UK. A Universal Jobs Guarantee programme should be part of that safety net.

Jake Shepherd is a researcher at the Social Market Foundation, a non-partisan think tank which works to promote evidence-based policy and cross-party co-operation in politics.

The Big Issue is fighting the unemployment crisis through the Ride Out Recession Alliance, bringing together the most innovative ideas and experts to help keep people in work and in their homes during the recession.

Get in touch to tell your story or offer ideas to support those in need by emailing rora@bigissue.com.

Image credit: Helen Cobain/Flickr