Covid tide is not sinking all boats so lifelines must be better aimed

UNDER-25s and people on minimum wage – with a big overlap – are the hardest hit in the current jobs crisis. The situation is grim, especially for those affected personally, but the details indicate the total economic impact may not be as bad as feared.

There is no silver lining in the latest unemployment figures, but sifting through what kind of jobs have been lost points the way to a more targeted policy response.

The policy focus early in the crisis included a rush to ease conditions for mortgage borrowers and to maintain relatively high levels of household income.

It reflected memories of the great crash, but now looks mismatched to the facts. Unlike in 2011, the cohorts on the frontline of this crisis are renters, not home owners.

In large numbers they’ve also never had jobs that paid the €305 a week they are now getting to stay away from work.

The next phase of supports to the response, from mid-June, should better reflect that.

That doesn’t mean the fact that the cohorts of people who so far have either lost their job, or seen their jobs temporarily suspended, are generally younger and lower paid isn’t desperately unfair.

Their livelihoods have been sacrificed because of a public health crisis that’s fairly unlikely to threaten their personal health.

For some, reality may only hit when their employer reopens

The youth and low pay of the so-called ‘precariat’ – who already had unstable jobs and uncertain accommodation – mean that few have deep resources to draw on.

But the jobs crisis is hitting workers worst on the periphery of the economy – less likely to have a mortgage or own a business, or to have dependants; or simply to have ever had big spending power. This suggests the underlying performance of the economy is better than the overall numbers might indicate.

PAYE workers in middle and upper tax bands – many in the public sector or in white-collar jobs – have disproportionately continued to work throughout the crisis, at least to date, and are a crucial underpinning to the tax base.

For now at least, those better-paid and older workers are in a strong position to get back spending quickly once restrictions ease – if they are given confidence and capacity to spend, it will boost the jobs market rapidly.

Even so, it’s clear the current economic tide is not sinking all boats equally. The political implications of that may be masked for now by the strangeness of the lockdown which combined with the increased Covid-19 payment rate obscures the reality that tens, if not hundreds, of thousands of people really have lost their jobs.

For some, reality may only hit when their employer reopens, but only half or a third of the staff get the call to return to work.

Without an action plan for those jobs, based on the hard evidence now emerging, the legacy of this crisis could be long and bitter.