As we navigate the second wave of the COVID-19 pandemic, more questions are being raised as to the extent of the economic damage, and burden caused by necessary government spending. With the collapse of Sir Phillip Green’s Arcadia Group putting 13,000 jobs at risk as well as Debenhams PLC’s collapse risking 12,000 jobs, if large brands are struggling, many SME’s and smaller business are also on the brink of ruin.
Unemployment is estimated to peak at 7.75% in 2021. This leads us to the ask that if mass unemployment is on the horizon what is the financial solution? And what makes a plan the best course of action for society?
Chancellor of the Exchequer Rishi Sunak has set out plans to invest £4.3bn to tackle mass unemployment by creating jobs via “Restart” schemes, putting money into schools, roads and infrastructure which requires large industry involvement. Coupled with Boris Johnson’s 10-Point Plan for a ‘Green Revolution’ which would create up to 250,000 jobs in implementing a clean air policy and £500m Hydrogen investments, the government endeavours to cut some costs in the public sector (pay freezes of some staff for instance), and create jobs in industry.
With the furlough scheme extended until March 2021 and redundancies expected in the following months, there will naturally be a period of time where unemployment is rife. This is not even combined with the expected economic impact of Brexit, of which the waters are unchartered resulting in a sustained period of economic recovery. This will impact individuals who make up society the most.
This brings us back to a conversation initiated by the likes of Ed Davey, Ian Blackford and around 100 other MPs, who advocated for a temporary Universal Basic Income (UBI) in April 2020 to mitigate the expected unemployment. This would be a recovery UBI for a short period of time to allow citizens to find means to sustain themselves.
UBI is income paid by the government at a uniform, fixed level to all citizens, usually above subsistence level. With some parallels to the furlough scheme which paid employed citizens around 80% of their income, UBI provides income for the disadvantaged, those participating in non-paid work (often womxn) such as domestic care and thus would increase a level of equality.
While UBI may be economically and ethically viable, would it enable social progression?
The start of the pandemic in 2020, was a year of unprecedented social turmoil, with the Black Lives Matter movement gaining a larger platform, feminism becoming more intersectional and more womxn being elected to leadership positions than ever before (including the first ever womxn of colour as Vice-Present elect in the US).
From where we are now in the pandemic, some may argue that UBI would not allow for society to progress, and could be perceived as inadvertently anti-feminist in practise. This is because it may create a form of occupational segregation where womxn would be more likely to stay within domestic roles and not in leadership positions – it provides them with the means to ground themselves in domestic work. As well as decreasing female workforce participation, it would also then decrease motivation for womxn to pursue gender-symmetrical lifestyles.
So while governments devise their strategy for economic recovery, such a plan ought to be sustainable, and mindful of the social as well as financial impact. While a UBI may be an ethical course of action and a positive short-term recovery option allowing citizens time to get back on their feet following what have been a devastating 10 months, it may not be the correct long-term action to take.