By Dora-Olivia Vicol - 22 February 2021
On the 3rd of March the Chancellor is due to make one of the most anticipated budget statements in recent years. Covid-19 has been hard on migrant workers. To heal the scars, the Chancellor will need to extend support schemes that protect the most vulnerable, and realise that recovery is not just about lifting lockdown, but livelihoods.
The pandemic has hit migrant workers hard
Unemployment among EU migrants has doubled during the pandemic. While ONS data shows that the economic downturn did damage across the country, unemployment soared from 3% in Q3 2019 to 6% in Q3 2020 among EU-born workers, compared to a rise from 5% to 7% among UK-born workers.
Much of this vulnerability is due to the fact that the pandemic has ravaged sectors like hospitality and retail, which traditionally rely on migrants. As many as 72% of workers who had a job in hospitality in February last year, were either no longer working, furloughed, or lost 10%+ of their pay in January 2021, according to the Resolution Foundation. This is an industry where almost a third of staff are migrants. Similar trends apply to the retail industry, where almost a fifth of staff are foreign-born.
Migrants’ disproportionate exposure to the pandemic is also due to their over-representation in low-protection contracts. First, self-employment. The rate of self-employment was 10% among the UK born population, but 14% among EU migrants, and more than twice as high among Romanians and Bulgarians (22%). Second, a higher proportion (4%) of migrants work on easy hire easy fire zero hours contracts, compared to UK-born adults (3%). According to the Resolution Foundation, people with either of this status were significantly more likely to see a drop in pay, or stop working altogether during the pandemic.
Support schemes must continue
To protect the most vulnerable, the government needs to continue its support schemes. Furlough, the Self-Employed Income Support Scheme (SEISS), and the £20/ week Universal Credit uplift are all due to expire at the end of March and April. This would be devastating for the millions of people whose livelihoods depend on them.
An abrupt end to the £20/ week Universal Credit uplift would be particularly damaging for people who failed to qualify for other government schemes. This includes casual workers who were easier to fire than to furlough, but also the recently self-employed. It may also include people who are vulnerable to future job losses. According to one survey by the Resolution Foundation, one in six (18%) workers who have been on furlough for six months or more fear for their jobs, and 3% had already been told they would be made redundant.
To prevent a crisis of poverty, the government needs to continue its support schemes, and recognise the importance of Universal Credit. Furlough was a possibility left to employers, not a right of all workers. As more jobs are at risk of disappearing, Universal Credit will become the only financial lifeline for millions of people. They need assurances fast, and they need this for the long term.
Recovery starts with lifting livelihoods
To aid recovery, the government needs to lift livelihoods, not just lockdown. The budget should reflect this in three key ways.
First, by investing in employability programmes. As many as 1.9 million people have been without work for 6 consecutive months this past year. Some will have built careers around sectors that may never fully recover, even after lockdown. Supporting them in finding new employment will take careful, sustained investment in retraining and employability programmes. This is particularly the case for migrant workers who, though highly qualified, are less likely to be employed in positions commensurate with their training. As many as 38% of Work Rights Centre beneficiaries have higher education qualifications, but only a small fraction work in managerial positions.
Second, recovering the economy will need recovering morale. The period of social isolation and unemployment have generated a real mental health crisis. Our advisers have assisted people who were on the verge of breaking down. Before we can even talk about employment levels, we need to think about how to rebuild people’s sense of confidence and self-esteem. This will require investing in mental health and wellbeing programmes.
Finally, the budget cannot forget the fact that our recovery is happening in the shadow of Brexit. Because of Brexit, all EU nationals have to prove their right to work and live in the UK. But the process has been fraught. We have had reports where people who had already been granted pre-settled status were made a job offer, then had it withdrawn, due to the employer’s failure to understand the new ‘right to work checks’. We’ve heard from people who could not find employment because the Home Office was still processing their applications, and employers refused to accept EU IDs as proof. Most worryingly, we’ve written about the delays and rejections of EU nationals rushing to apply for a National Insurance Number (NINO), after a nine-month period when the DWP suspended applications.
This budget should ensure that a lack of resources in the Home Office and DWP won't stand in the way of recovery. Other commentators will no doubt unpack how Brexit shapes British firms’ abilities to trade with the European market. It is worth remembering that Brexit also shapes European workers’ abilities to take part in the recovery within the UK. Making sure that all EU nationals can get a NINO and prove their right to work is a simple, but significant, first step.
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