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TUC calls for ‘economic reset’ to tackle COVID class divide

The Trades Union Congress (TUC) has called for an urgent “economic reset” to tackle the huge class divide in Britain that it said has been exposed by the coronavirus pandemic.

The union body published polling on 9 September showing how low-income workers have borne the brunt of the pandemic with little or no option to work from home, no or low sick pay and reduced living standards, while workers that are better off have enjoyed greater flexibility with work, financial stability and increased spending power.

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It found that low-paid workers were almost twice as likely as high-paid workers to say they have cut back on spending since the pandemic began.

Of those earning less than £15,000, 28% said they had cut back on spending, while only 16% of those earning more than £50,000 had.

High earners, meanwhile, were more than three times more likely than low-paid workers to expect to receive a pay rise in the next 12 months, at 37% compared to 12%.

Speaking to HR magazine, Financial Inclusion Alliance co-founder Norman Pickavance said there were two clear indicators of the growing class divide during the pandemic.

“The lowest income groups saw the biggest rise in debt, while the highest income groups saw an increase on average of £7,000 worth of savings. You couldn’t really get a more stark example, in practical terms, of what the pandemic produced.”

Low-paid workers were found to be four times more likely than high-paid workers to say they cannot afford to take time off work when sick, at 24% compared with 6%.

And only 35% of low-paid workers said they get full pay when off sick, compared with 80% of high-paid workers.

Pickavance’s biggest hope from any post-pandemic reset would be an increased government focus on upskilling.

“Whether it’s lorry drivers, nurses, high tech, there are huge shortages and so there’s a major opportunity to upskill the UK workforce," he said.

"But there’s nothing at this juncture happening at scale to address this issue.

“We’re seeing lorry driver rates going up to £45,000-£50,000 a year – in many ways upskilling people is the best way out of long-term poverty, and so I’d like to see a much bigger emphasis on that, but the government are standing back and saying the market will sort it out. It might, but in the short term it’s going to be quite dysfunctional.”

The TUC said the end of furlough poses a serious threat to low-paid jobs in the arts and entertainment, accommodation and food, and ‘other services’ industries.

Combined with the cut to Universal Credit, it said low-paid workers will be dealt “a hammer blow” in the months ahead.

To prevent unnecessary hardship, the body is calling on the government to extend the furlough scheme for as long as is needed to protect jobs and livelihoods and put in place a permanent short-time working scheme to protect workers at times of economic change.

It also wants the government to cancel the planned £20 cut to Universal Credit; ban zero-hours contracts; raise the minimum wage to at least £10; make statutory sick pay available to all and raise it to a real Living Wage; and introduce new bargaining rights for workers.

TUC general secretary Frances O’Grady said: “Everyone deserves dignity at work and a job they can build a life on. But too many working people – often key workers – are struggling to pay the bills and put food on the table.

“It has been a tale of two pandemics. This COVID class divide has seen low-paid workers bear the brunt of the pandemic, while the better off have enjoyed greater financial security, often getting richer.

“This should be a wake-up call – we need an economic reset. It’s time for a new age of dignity and security at work."

The TUC's polling was conducted by Britain Thinks and saw 2,134 workers in England and Wales surveyed between 13 and 21 May 2021.