The Chancellor, Rishi Sunak, has this evening announced that the Government will meet 80% of wage costs for workers to ensure that they keep their jobs during the coronavirus crisis. The package has already attracted criticism, because it does nothing for the self-employed and freelances.
That point is well-made, but there is a deeper problem with Sunak’s proposal. Essentially, it supports a model of employment that for many people simply doesn’t exist any more; those on zero-hours contracts, or on contracts as part of the gig economy, occupying that twilight zone between employment and freelancing. It does nothing for the millions of people who do not benefit from traditional permanent employment contracts, and that often means the poorest and most insecure.
I have argued before that we face a crisis of work; one in which work no longer pays, in which real wages are falling, in which poverty is predominantly an in-work problem, in which those who are able to earn a little more effectively suffer swingeing marginal tax rates as benefits are withdrawn; in which nearly all the benefits of such economic growth as there has been in the last decade have accrued to owners of assets – rentiers – rather than workers who sell their labour. The basic proposition of capitalism – that you can earn a decent living through work – no longer applies.
During this crisis we have seen increasing calls for what is described as a Universal Basic Income for those who lose their incomes as a result of the drastic measures needed to deal with coronavirus. In fact, the calls have not, in the strict sense of the word, been for UBI as such, as they do not involve the changes to the tax and benefits system that UBI would entail. But they do recognise that for very large numbers of people, often those on the lowest incomes in the most vulnerable occupations, the only way to preserve their incomes is through substantial transfer payments, directly to those individuals, so that they can pay their rent and buy food when they cannot earn through no fault of their own. Indeed, if there is one silver lining to this crisis, it is perhaps that people will grow out of regarding poverty as some kind of moral failing; a narrative that should have been outdated ever since Beveridge but has crept back across the political spectrum.
But Sunak has not risen to the challenge. By focussing his scheme on traditional employer-employee relations he has left millions of people outside the safety-net; the freelances, the contractors, those on zero-hours contracts. His is a solution that seems oblivious to the structure of work in the third decade of the twenty-first century; and, focussing as it does on traditional employers, appears more concerned with preserving profit for those employers than alleviating the problems faced by workers.
And it exacerbates the growing divide between traditional salaried employment on permanent contracts – often favouring the better-paid – and the economically insecure. It does not address the crisis of work and actually broadens the divide.
It is possible that one outcome of the coronavirus crisis is that we start thinking a lot more intelligently and progressively about work and income; that we start thinking about alternative models, of which Universal Basic Income is one. But whether you call it UBI or not, the pressing need now is for a substantial transfer payment to individuals. And it would need to be universal because there is no time to set up a means-test; for the better-off such a payment could be reclaimed through tax changes in the next financial year.
But, for now, the need is pressing. Unless and until the Chancellor is prepared to make universal transfer payments, rather than working through traditional permanent employment contracts, he will not address the problem and he will increase inequalities. This is not the time for half-measures.
Notes from a Broken Society 
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