Jobs crisis is not looming – it is here already

JUST because last week’s unemployment figures didn’t really surprise anyone, it doesn’t mean they shouldn’t give us pause for thought.

It’s true that, as some have pointed out, they weren’t as bad as they could have been. But what they don’t take into account are the three-quarters of a million employees in Scotland still on furlough – or the 155,000 people benefiting from the self-employment income support scheme. We don’t, if we’re being honest, know how many of these people will be able to get back to work and how many will have no choice but to look for something new.

It’s also important to remember that the figures refer to the quarter from March to May – a time when lockdown was at its most severe, but also when many of us thought we were in for something of a shorter, shallower shock.

And a lot has happened since then. We’ve seen the gradual easing of lockdown and more people back in some form of business, which could be read as a sign that this quarter’s figures will be a bit brighter.

But, sadly, the last few months have also seen a string of high-profile redundancy announcements from big business. Alongside this, largely unnoticed, has been a significant spike in smaller employers looking for advice on how to approach job losses and reporting that they’ve had to lay staff off.

This leads to the conclusion that, the jobs crisis isn’t “looming” – it’s here, now.

While there’s no single, simple solution, there are perhaps three key things that, were we to weave them together, would give us the best chance of turning things round.

First, we need to boost consumer demand, to create and sustain as many jobs as possible. Second, we need to make sure that people who are looking for work are able to fill the vacancies. And we need to keep as many firms in business as we can.

On consumer demand, we’ve seen a raft of measures – from the temporary VAT cut in hospitality to the meal discount scheme – to encourage the public to vote with their wallets and start spending. We also need a concerted drive to reassure customers that it’s now time to get back out there, generate some footfall and get money moving around their local economy.

Time will tell whether initiatives like this are hitting the mark, but the more that consumer behaviour gets back to something approaching normal, the more likely it is that those still on furlough can get back to work and, indeed, that employers will need to get hiring.

At the same time, there’s no point in creating the conditions in which employers want to take on staff if there’s a dearth of suitable candidates.

That’s why it was good to hear Economy Secretary Fiona Hyslop tell MSPS last week that £100 million is being made available for employment support and training. Given how severely their prospects have been marred by the coronavirus outbreak, half of this cash will go on helping young people into work. But again, everything here will hinge on the implementation.

Finally, small businesses have a proven track record of employing those further from the labour market. But no-one can hire new staff if they’ve gone out of business.

The recovery is so fragile that any one of a host of things could push a business over the edge. It could be a bad debt, short-term cashflow issues, a cost increase or having to close again as a result of Test and Protect.

It will be concrete steps to safeguard and nurture the smallest businesses that will be key to averting the biggest economic and employment disasters.