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Recovery strategy needs to acknowledge uneven economic impact

 

Journal column by Marianne O Sullivan, policy adviser, North East England Chamber of Commerce

Coronavirus has had a large impact on the region’s economybut the impact is not evenly distributed throughout society.We need to recognise this and ensure a fair economic recovery process to avoid a recession further entrenching inequalities in the North East.

The crisis has clearly hit certain sectors harder due to the unique impact of social distancing and employees being unable to work from home.

Data from the ONS in April showed that the highest proportion of workforce being furloughed was the accommodation and food service activities industry (80%) and in the art, entertainment and recreation industry (68%). Many of these sectors tend to employ younger people making them more likely to be facing redundancy compared to other age groups. Data from April has shown that one-in-ten 18-24-year-olds have lost their main job, more than double the 4% average across every age groups.

In all sectors the low-paid are also more likely to be furloughed than their higher-paid counterparts, those who work part time or on temporary contracts are also more likely to be impacted compared to full time workers.People on lower earnings are far more likely to be facing job insecurity in the region.

This disproportionate impact the low paid and people on temporary contracts will help to entrench inequality in society. BAME workers are over a third more likely to be in temporary or zero hours work than white workers. 69% of low earners are women.They are also more likely than men to be working part-time with 40% of women in employment working part-time in 2019.

Coronavirus is also likely to have a disproportionate effect on many disabled people due to the need to self-isolate, ONS data from April has shown that nearly two-thirds (64.8%) of disabled adults said COVID-19-related concerns were affecting their well-being.

We need to have a recovery strategy that acknowledges the uneven economic impact of Covid-19 on society. The pandemic has shone a light on the social and economic divisions that exist within our region, the rest of the country and us as individuals. There is an opportunity for the UK to tackle these divisions through a fair economic recovery process, measures need to be tailored towards the most impacted regions in the UK as well as the most impacted sectors and groups in society, particularly those on lower earnings.