Urgent action needed to support transition to post-Coronavirus economy and protect low-paid Londoners

Central government, the Mayor of London and local government must work together to support Londoners to adapt to a post-Coronavirus economy, as new research shows low paid workers in the capital have been hit hardest by the jobs crisis.


27 10 2020


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The coronavirus crisis has hit London’s labour market hard. The claimant count in London has risen by 161% since March – faster than any other region or nation of the UK – to the highest levels since records began in 1986. The rise has been even sharper among young people, with the youth claimant count nearly trebling (183% increase) since March.

Low paid Londoners are bearing the brunt of the crisis. They are nearly twice as likely to have been furloughed and nearly four times as likely to have lost their jobs compared to other Londoners. Low paid Londoners are nearly four times as likely to be struggling to afford both their bills and basics such as food. Low paid workers in the capital are more worried about the future; they are more concerned both about losing their job, and being able to find work.

At the end of August, there were still 557,000 jobs furloughed in London, the highest proportion of any region of the UK. The end of the Coronavirus Job Retention Scheme at the end of October, just as social distancing requirements were tightened, had risks a cliff-edge in support, and a catastrophic second wave of job losses. Had the government not changed course, nearly 270,000 Londoners would have been at risk of losing their jobs over the winter.

Crisis in the capital


The report calls for central government, the Mayor of London, and local government to work together to focus on supporting low paid Londoners to adapt to the post-coronavirus economy. It sets out a four-point plan:

  1. Invest in job creation, with a focus on jobs-rich and socially useful sectors such as social care, childcare, housing and green jobs;
  2. Devolve employment support so that London can design a welfare to work programme that meets local needs, and supports Londoners into good jobs which lift them out of poverty;
  3. Ramp-up retraining support to help Londoners to access the jobs that will be created as the economy recovers, including through an enhanced lifetime skills guarantee, and sector based skills academies focused on London’s growth sectors;
  4. Extend social security support by introducing a further increase to Universal Credit, to cushion the impact on workers who do lose their jobs.
Stephen Evans, chief executive of Learning and Work Institute said;
London is the wealthiest part of the UK, but it also the most unequal. Even before the pandemic, too many Londoners were struggling to get by, stuck in low paid and insecure work. These inequalities made London’s labour market particularly vulnerable to the impact of the pandemic. It is increasingly clear that low paid workers in the capital have been hit hardest by the labour market crisis. We need to see central government, the Mayor of London and local government working together to create jobs, and ramp up employment advice, and retraining support.
Bharat Mehta CBE, chief executive of Trust for London, said;
The coronavirus crisis has had a significant impact on lower paid workers in the capital. The prevalence of low pay and insecure work in the capital has left London’s labour market particularly vulnerable to the economic impacts of the pandemic. In the short-term, we need to focus on protecting jobs and income. In the longer-term, we need to ‘build back better’ by transitioning to an economy that provides better work for all. A commitment to a Living Wage and Living Hours must form a basis of this new settlement.
Alessy Beaver, Step Up partnership
As this report makes clear, low paid workers are bearing the brunt of COVID-19 job crisis, with particular groups including women, BAME communities, migrants and young people disproportionately affected. As an in-work support provider, helping workers facing the triple threat of reduced hours, income and job security, we welcome measures aimed at protecting workers from the economic fallout of COVID-19, including a more comprehensive Job Support Scheme and safeguards for part-time jobs. Emerging from this crisis, we have a rare opportunity to ‘right the wrong’ of in-work poverty through investment in quality job creation and retraining programmes - both locally and nationally.
Valentina Alfano, Education, Training and Employment Manager at the Indoamerican Refugee and Migrant Organisation
Migrants from the Latin American community are overrepresented in precarious and low paid jobs, working mainly in unregulated sectors such as cleaning and hospitality. The pandemic drastically affected their condition, exacerbating pre-existing inequalities; out of the 249 people interviewed as part of IRMO's projects, 23% were furloughed, 40% had lost their jobs, and 86% feel anxious about their future. IRMO fully supports Learning and Work Institute’s four point plan which aims to provide a stronger financial and job-training safety net for the lowest paid and most vulnerable Londoners, and calls on the Mayor of London and Central Government to adopt it.