Restart as you mean to go on

Last week we outlined some of the issues that will face people as they are asked to go back to the workplace. In England, we’ve now seen the government ask many workers to do just this, and from today, more people will be making the commute into their places of work south of the border.

Since the announcement was made on Sunday evening (and later clarified) there has been concern and criticism of what is being asked of people in England. Many of the points we made last week have been brought to the fore and remain unanswered.

There are clear lessons that the Scottish Government can learn, including what to avoid, from what has transpired south of the border. But this next phase is not a simple one and this article outlines some of the really difficult issues that we know need to be dealt with.

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One of the biggest concerns raised in the last couple of days in England has been the perception that those on lower incomes are being asked to return to work whilst those on higher incomes remain at home, primarily due to the fact that those in higher paying occupations are more likely to be able to work from home. Those on lower incomes are also less likely to own a car, making public transport the only option. As in England, mortality rates are known to be higher in more deprived areas in Scotland. Addressing concerns over the risks that people are being asked to take will need be reflected in the plans for workplace reopening in Scotland.

There are of course reasons why some businesses, who can’t rely on people working from home, should reopen. Even with the furlough scheme, firms have other overheads to meet and the longer the shutdown goes on, the more likely that businesses will run out of cash and not reopen. These permanent ‘hysteresis’ effects are the ones that we really want to avoid, not least because of the looming spectre of long-term unemployment which would hit the poorest hardest.

The trade-offs are difficult to navigate. The best we can hope for is that the Scottish Government moves forwards in a way that tries to avoid causing harm, both health and financial, on those least able to cope with it. To do otherwise would deviate from the path that the Scottish Government set out for the medium term: “to renew our country, looking towards a fairer and more sustainable future beyond the crisis”.

This article looks at some of these issues in the light of what we have seen over the last few days in England, and reiterates some of the difficult choices facing the Scottish Government.

Government needs to take responsibility and not give people impossible choices

One of the key concerns we raised in our article last week was around the expectations for those who have barriers to leaving their home. When asked about the issue of childcare, the Prime Minister set out his expectation that employers would be ‘sympathetic’. But will all employers be willing, or indeed able, to do this if they need their skilled workforce on site to reopen? Caring responsibilities are not the exception, but the reality, for many workers and are all the more pressing for single parents.

Are there options here? The UK Government is seeking to bring certain age groups in to schools from  June 1st and is asking pre-school settings to reopen. So far, the Scottish Government has said schools will not be following suit here.

The first decision is whether they will tell employers to continue to offer furlough to parents or find some way of offering alternative care.

Here there are different options available. One option could be an extension to the scheme in place for the children of key workers who can access school and nursery, or alternatively, the idea of exclusive ‘social bubbles’ could be looked at to help parents share out the care load. Whilst the latter is difficult to monitor and enforce, it could be the best of a set of bad options.

If worst comes to worst and parents are forced to leave their jobs due to an absence of childcare options, it will fall to the state to find ways to support them. Although complicated (see our article earlier this week) there are ways to get money out the door to families with children, which may well be needed if parents lose their earnings suddenly.

The other group of people who will struggle to leave the home are those with health conditions which make them higher risk with regards to the virus. It simply will not be possible for these people, and in some circumstances their family members, to return to workplaces until the virus has subsided much further or a treatment or vaccine is available. There have been calls in England to exempt these people from orders to return to work.

The furlough scheme should be able to provide a good financial cushion for employees and employers here and, if different guidance is set out, we could see divergence in levels of support required in Scotland compared to England.

A pan-UK approach would be preferable, but isn’t in evidence.

With social security support for ill health and carers now partly devolved to Scotland, there could be a role for Scottish Government here (already evidenced in small way by the one-off top up of an existing payment to carers that is currently working itself through the Scottish Parliament as part of the Coronavirus (Scotland) (No.2) Bill).

Public transport is unavoidable

Asking people to return to work but avoid public transport puts people in an impossible position. Without a car, there is simply no other option for long commutes.

Our previous article pointed out that car ownership is lower among those with the lowest household income. At the same time, and in a sort of double whammy, those in lower earning occupations are also less likely to be able to work from home.

Rather than saying avoid public transport, the emphasis needs to shift to how it can be made to work in the safest way possible to lower the risk and ease anxiety. Those who can drive, walk or cycle will no doubt be doing that. Those that can’t will need to be prioritised.

Where people work is more important than the sector

The other crucial part of the picture is workplaces themselves.

No two businesses are the same and a sector approach to producing guidance is not necessarily helpful. Even those that produce identical products can be doing so in workplaces that operate entirely differently – for example an automated versus a labour-intensive production process – and the same business may operate across multiple types of workplace settings. – for example, back office, warehouse and shop floor in retail.

Therefore, guidance on workplace settings, rather than sectors, is likely to be more helpful for businesses who need to try and make adaptions for their whole workforce before reopening. This is the approach that has been taken by the UK Government, and once it was made available, has been broadly welcomed by Trade Unions.

Communication is key

Workers and employers alike are heading somewhat into the unknown. Simple, comprehensible and coherent advice is clearly needed.

This is tricky when there are trade-offs.

Humans aren’t well known for being able to process risk particularly well – especially when some (the virus) are staring them in the face and others (risk to their future livelihoods and long-term health) are further away.

Scotland has largely maintained a clear and consistent message to date, but this will get harder as circumstances change and we are asked to venture back out of the home.

There is also now the challenge of dealing with different messages from UK and the Scottish Government. Whilst entirely appropriate where the public health situation demands it, it risks confusion over who to listen to, especially given the grasp that parts of the media seem to have over which policies apply in England only.

There are of course possible economic implications of the later restart in Scotland. Over time, we will also start to see if this leads to a shifting in market share as English based companies get a head start on their Scottish competitors. On the other hand, the approach in Scotland may allow for a smoother reopening with less risk of future shutdown.

A more immediate issue, however, is for cross-border firms trying to implement different guidance for a workforce split across UK borders. Given the UK exists in its own single market, with very limited divergence in workplace policy, this is new ground.

Concluding thoughts

The short-term trade-offs are not just the risk for individuals but the risk to others and another round of exponential spread of the virus. This is why erring on the side of caution makes the most sense for people and for future economic prospects at this time.

Blanket communications asking whole swathes of people to return to work without addressing individual and household barriers to doing so is foolhardy, and inevitably leads to those who are being asked to do so feel like they are taking on more risk than others who can work from home.

Because of the inequalities that already exist in our labour market, we have to recognise those in lower earning occupations will be on the front line of this. Mitigation of risks for these people is critically important for both for their physical and mental health. This includes including working out how to make public transport and workplace settings safe.

For those with other barriers to returning to work, due to children or pre-existing health conditions, their issues cannot be swept under the carpet or left to employers alone. Whilst Scotland cannot force employers to behave in certain ways (employment regulation is reserved to Westminster) and the Scottish Government has less ability to provide financial support than the UK Government, it does have many levers under its control – including over childcare and education settings, public transport and financial support from social security. The Scottish Government is also charged with providing guidance on how businesses should operate from a public health perspective.

All eyes will be on whether the Scottish Government use their levers to restart in a way that sets Scotland up for the promised ‘renewal’, or takes us on a different path leading towards increasing health and financial inequality.

Unfortunately for fans of bedding plants, there are more important issues to deal with before attention can turn to when your local garden centre will reopen.

Authors

The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.

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