One year on, how big a deal was the furlough scheme? Short answer: a v v v big deal.
I think we sometimes underplay this.
It has pervaded our lives in a way few if any other economic policies have and had all sorts of unintended consequences - good & bad. thetimes.co.uk/article/d724c3…
I think we sometimes underplay this.
It has pervaded our lives in a way few if any other economic policies have and had all sorts of unintended consequences - good & bad. thetimes.co.uk/article/d724c3…
Comparable data on this isn’t especially easy to come by but the last time the @OECD had a look (turn of the year), UK had more people on furlough than any other country. Think about that for a second. And note we didn’t have either the most cases or toughest lockdown back then
When you think about it it’s pretty remarkable. Britain was unusual in Europe in not having a job retention programme (short time working) before #COVID19. But the generosity of the furlough scheme, and the enthusiasm with which it was taken up exceeded most of Europe.
The furlough scheme has saved millions of people from losing their jobs and has supported the economy through lockdown. BUT it’s possible to recognise this, to agree that something of this sort was necessary, and to ask whether it was really the right scheme for the UK
Obvious counterpoint is the US, which took a somewhat different stance. Rather than protecting JOBS the focus was to protect WORKERS. Unemployment shot higher but people got stimulus cheques & higher jobless payments. Now: US unemployment is falling while UK’s is rising steadily
Interesting chart from BoE’s Jan Vlieghe: in US households ended up receiving more “additional income” than their British equivalents. Upshot is they may end up spending more of it this year => bigger rebound.
(It was also spread more evenly; furlough may have widened inequality)
(It was also spread more evenly; furlough may have widened inequality)
The @OBR_UK recently pointed out that some firms may be using furlough money “as a form of subsidised sick pay”.
UK has least generous sick pay regime in the developed world. So perhaps no bad thing that some firms are improvising.
But what abt those not covered by furlough?
UK has least generous sick pay regime in the developed world. So perhaps no bad thing that some firms are improvising.
But what abt those not covered by furlough?
The furlough scheme was a brilliant and unusual piece of policymaking, forged in the crucible of an awful crisis. Its influence is more pervasive than I think is widely accepted. But there are also serious problems & big unintended consequences. More here: thetimes.co.uk/article/d724c3…
One other thing. A big concern abt the furlough scheme was the risk it could zombify parts of the economy, preserving obsolete jobs. That might be happening.
BUT. Promisingly, company incorporations are running at the highest rate in a decade. So there’s still some dynamism there
BUT. Promisingly, company incorporations are running at the highest rate in a decade. So there’s still some dynamism there
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