Pandaemonium

WHY DOES IT REQUIRE A PANDEMIC FOR…

Window cleaning

This essay, on what the coronavirus pandemic has laid bare about policy towards low-paid workers, was my Observer column this week. It was published on 22 March 2020, under the headline ‘Coronavirus exposes society’s fragility. Let’s find solutions that endure once it’s over’.


In a crisis, a society often reveals both its best aspects and its worst. So it is with Covid-19. On the one hand there is the selfishness of hoarding, on the other the selflessness of mutual aid groups. On the one hand, there is Britannia Hotels, which has not just sacked staff but evicted them from their accommodation (a stance it now appears to have reversed under public pressure), on the other the footballer-turned-hotel-owner Gary Neville, who has promised to pay wages to all employees through the pandemic while also providing accommodation free of charge to NHS staff. On the one hand, there are medics and paramedics working heroically with inadequate protective equipment, on the other the Home Office using the ‘health surcharge‘ to extort money from foreign doctors for the right to make use of the same health service they are helping to sustain.

In a crisis, too, issues that policymakers have long ignored suddenly become urgent. The pandemic has laid bare the insecurity of work, the cruelty of welfare policy, the hypocrisy of a system in which every time a crisis hits we are told that ‘we’re all in it together’ but in which, before and after the crisis, the needs of the poorest and most vulnerable are largely ignored.

The economic burden imposed by the policy of social distancing has fallen most upon the poorest and the lowest paid, many of whom cannot work from home and have few savings on which to fall back. In response, the chancellor, Rishi Sunak, unveiled on Friday a major package of measures, including grants to businesses covering up to 80% of employees’ wages, and increases to universal credit and working tax credits.

The measures are significant, necessary and welcome. There are holes in the package, especially for renters and the self-employed. Nevertheless, Sunak was right to call it ‘unprecedented’. But it also raises the question: why does it require a pandemic for the needs of low-paid and insecure workers to be taken seriously?

Certain policies, such as the state subsidy for wages, are specific responses to the current crisis. But what the pandemic has really exposed are the inadequacies of successive governments’ responses to low pay and poverty. And while it might seem like carping to be critical at this time, there are deeper questions that need asking about policy as it has evolved over many years.

With the coming of the pandemic, policymakers have suddenly discovered that those normally consigned to the margins of the labour force as ‘unskilled workers’ are crucially important to the functioning of society. Cleaners, shopkeepers, delivery drivers – these are the people, often migrants or women, on whose invisible labour society depends, but whose efforts are usually treated with contempt. The government’s list of ‘key workers’ is a list largely of jobs in which workers get paid derisory sums for doing vital work. ‘Low-skilled’ has become as much a measure of moral worth as a job description.

The impact of the pandemic has also led people to notice that statutory sick pay is just £94.25 a week. The health secretary, Matt Hancock, admitted on BBC’s Question Time that he could not live on that. ‘But you expect others to live on it,’ Fiona Bruce observed. And even that meagre sum is not available to two million lower-paid workers, those on zero-hour contracts or the self-employed. The problem of inadequate sick pay has existed for years without policymakers taking much notice. Not being able to afford to go sick may particularly be a problem in a pandemic, but it’s a dilemma that has long confronted thousands of self-employed and gig-economy workers.

Nor is the issue just sick pay. As the Resolution Foundation’s Torsten Bell has pointed out, unemployment benefits are worth less in real terms now than they were in the early 1990s. Jobseeker’s Allowance and Employment and Support Allowance for the disabled stand at just £73.10 a week if you’re 25 or over – and £57.90 if you’re under 25. Carers’ allowance, for those who spend at least 35 hours a week looking after someone disabled, is a scandalous £66.15 a week. Politicians and policymakers have long accepted what is effectively state-sanctioned poverty within our benefits system.

Successive governments from the 1980s on have stigmatised claimants and made the welfare system harsh and mean-minded. In parliament last week, Iain Duncan Smith, the architect of the disaster that is universal credit, warned the government against the introduction of any form of Universal Basic Income (UBI), as a ‘disincentive to work’. There are reasonable arguments for and against UBI. But the claim about ‘disincentives to work’ has too often been used as a means to cut benefits to the bare bones, and was, in fact, central to Duncan Smith’s rationale for universal credit, turning what could have been a reasonable reorganisation of the benefit system into a punitive one.

And then there is the issue of private renters. The government has announced a three-month delay in landlords being able to enforce evictions. For those who have lost wages or their jobs, that is merely to defer rather than to eliminate the problem. As with low pay and benefits, the issue is a longstanding one. Many studies have shown the relationship between private renting and poverty, the inability of working families on low wages to rent in many parts of the country, and the fear of eviction and homelessness, even in normal times. The pandemic has not created the predicament, it is simply exacerbating a pre-existing problem.

Coronavirus has exposed the fragility of social life. It has revealed, too, that a large measure of that fragility is the result not of the pandemic, or of the attempt to combat it, but rather has been built into the system through deliberate policy. The worry is that beyond the pandemic, and the temporary measures announced by the chancellor, the issues of poverty and inequality will once more be ignored.

The 2008 financial crisis was resolved with vast amounts of public cash. And then the public was made to pay for that generosity with a decade of austerity. We may need to do ‘whatever it takes’ to bring the pandemic under control. But once it is under control, will we also then do whatever it takes to deal with low pay, insecure work and inadequate benefits?

8 comments

  1. Does the mortgage “holiday” mean that interest otherwise paid will be added to the loan balance? This would make sense, whereas government paying the Interest, or the lenders being asked to waive the interest, would be a subsidy to one portion of society (and not the most needy) at the expense of the rest of us, or of the lenders’ shareholders.

    The Scottish government took early action, extending the period required to enforce eviction for non-payment from three months to 6 months, but I have not heard any proposals for how to deal with the accumulated debt, which would invariably be far in excess of the tenant’s deposit.

    • damon

      “why does it require a pandemic for the needs of low-paid and insecure workers to be taken seriously?”

      I don’t know as my understanding of economics is very poor, but isn’t it something to do with the nature of capitalism? Why can’t Morocco just build state-of-the-art modern infrastructure and provide a generous welfare system for its people? It’s because they don’t have the money or the economy to back that up.
      Britain is in a better position than that, but it still comes down to what we can actually pay for.
      If it was just a simple matter of choice between nasty Tories and a form of Labour Party socialism – and both could work without long term negative consequences for the economy and the country, then obviously we should choose to have the free spending socialism.

      I agree with what’s said here about “Cleaners, shopkeepers and delivery drivers” – they really are essential workers. I certainly do think it should be possible to design a system where people doing these kinds of jobs were seen to be as providing invaluable services and paid accordingly. But I don’t think you can do it with our kind of capitalism, which seeks to import people from all over the world to fill its (so-called under this system) “labour shortages”. It seems like we are going for this growth model where there are always labour shortages which need to be filled – like mentioned in the article, by taking doctors and nurses from developing countries.
      It’s unfair and unsustainable in the long run.
      Israel, particularly in the past, showed an example of how a society could all work together, with their
      Kibbutz and Moshav models, which was a kind of “all in it together” socialism. But we can’t really do that in the UK without a complete transformation.
      A country like Norway could possibly do it too, having a small population and having a huge wealth reserve built up over the years. They could pay their cleaners and delivery drivers the national average in wages, and because of that, could probably find people willing to do those jobs.
      It’s just that in our economy, every employer thinks that they should have a right to have a plentiful supply of workers who work for low wages. So farmers say that they need to get in foreign workers to pick their fruit etc.
      But run the farms like kibbutzim and the problem of supply of workers might solve itself.
      Or don’t run that place as a commercial farm. You don’t have the right to expect you can import fifty workers from Romania just because you see a profit in growing daffodils in Cornwall. Maybe we just don’t need the daffodils.

      I also agree that our housing rental sector is dysfunctional and unfair. Other countries have regulated it better.
      But demand keeps going up too and thwarting all the efforts to build our way out of shortages.

      • I don’t know as my understanding of economics is very poor, but isn’t it something to do with the nature of capitalism? Why can’t Morocco just build state-of-the-art modern infrastructure and provide a generous welfare system for its people? It’s because they don’t have the money or the economy to back that up.
        Britain is in a better position than that, but it still comes down to what we can actually pay for.

        It’s also a question of policy. Over the past decade, for instance, British governments have been obsessed by deficit reduction and by the insistence that the burden of deficit reduction should fall almost entirely on spending cuts rather than tax increases. In reality that has meant that burden has fallen particularly on the poorest in society. It has also meant that Britain’s infrastructure is ill-prepared for the current crisis.

        I agree with what’s said here about “Cleaners, shopkeepers and delivery drivers” – they really are essential workers. I certainly do think it should be possible to design a system where people doing these kinds of jobs were seen to be as providing invaluable services and paid accordingly. But I don’t think you can do it with our kind of capitalism, which seeks to import people from all over the world to fill its (so-called under this system) “labour shortages”.

        Are you suggesting that prior to1945 and mass immigration, cleaners, shopkeepers and delivery drivers (or any manual labourers for that matter) were well paid and socially esteemed? Or that women should not be in the labour force because they tend to do many of the jobs labelled ‘unskilled’ and get paid less for it? That, after all, was an argument used by many in the postwar years to try to keep women out of the workforce. You know, sometimes it’s the case that immigrants are not the problem. Employers have always used reserve armies of labour to try to drive down wages – whether migrants, women, the old, the young, the unemployed. The issue here are not the specific groups of people. It’s a system that needs to keep wages down, the weakness of labour organizations in combating that – and the tendency of people to sow divisions by blaming one group or other as the source of the problem.

        • damon

          “It’s also a question of policy.”
          This is probably right. But really, what do I know about it? I listen to economists like Yanis Varofakis and Liam Halligan and just take a guess at who is talking sense or not.
          If it was just a case of increasing taxes or something like that, then OK, fair enough.
          To be more like Denmark maybe? But I agree, our infrastructure is poor. We can’t even run youth clubs sufficiently. Let alone a decent prison system. I’m not sure if there are any simple solutions. I’ll have to let the economists argue that out as it’s too complex for my understanding.

          “Are you suggesting that prior to1945 and mass immigration, cleaners, shopkeepers and delivery drivers (or any manual labourers for that matter) were well paid and socially esteemed?”

          No, of course not. But I am wondering about this point that David Goodhart made about not being able to have both a generous welfare state alongside large scale immigration from poorer countries. Or if we put wages up significantly in Britain, not expecting the country to not become even more attractive to potential migrant workers and immigrants. It’s one of the main reasons why so many migrants wanted to go to Sweden and not Poland.

          “The issue here are not the specific groups of people.”
          Like the difference between citizens of a country and the rest of the world?
          If you’re trying to build a welfare state in a specific country which is heavily defined by its borders and it’s people who are paying in to it, then it seems logical that they are a specific population also. Having an open borders policy at the same time as trying to bring about this fantastic new welfare state, seems to me that one would be working against the other.
          On the one hand you are trying to bring about order and efficiency and on the other you are encouraging flux and transience. Creating order in a transient society is much harder than trying to do the same thing in a settled environment. Just think of the difference between a town like Eastbourne and an inner city London borough like Newham. The housing situations alone are incomparable. If you made Eastbourne more like Newham through greater immigration, it would become poorer and more overcrowded and transient. More houses of multiple occupation and bedsits etc. More poverty too. Like Ben Judah described in his book “This is London”.
          https://www.theguardian.com/books/2016/jan/20/this-is-london-by-ben-judah-review

          Maybe it’s possible to incorporate all of those people (and millions more fleeing poverty and war in the future) into some idealised vision of what a country could be, but I think it makes it harder too. Although something like that could happen in the future. Beginning in the latter part of this century maybe. At the moment though, the world is too chaotic (I think).

  2. Under conditions of a fluctuating gdp per capita over the last decade with no certainty whether there will be a sustained increase in the future, then redistribution and societal transfers will need to fall most heavily on the professional middle class which no doubt includes yourself.

    https://www.macrotrends.net/countries/GBR/united-kingdom/gdp-per-capita

    Therefore, the big question is to what extent are you and the rest of the professional middle class (including the Resolution Foundation) prepared to reduce your income and your standards of living in order to pay much more tax and thereby benefit valuable skilled low income households and the permanently vulnerable groups in society.

    Answers in your next article please including a plan on how to transcend the metropolitan professional middle class’s much cited displacement activities, much of which involves taking attention away from themselves and then projecting their redistributive responsibilities towards the poor on to their adversaries/opponents.

    https://en.m.wikipedia.org/wiki/Displacement_(psychology)

    • It’s odd that only people with whom you politically disagree seem to belong to the ‘metropolitan professional middle class’. What are you? A horny-handed son of toil? And, yes, I’ve always argued for a less regressive, more redistributive tax policy. What I’d really like to see, though, is a fundamental shift in social policy so that social need becomes the defining principle.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s