Many workers in sectors labelled ‘critical’ by the government* are “more exposed to the Covid-19 health and economic crises” and “less likely to have savings to protect living standards if their incomes fall”. So says Resolution Foundation in a ‘Rainy Days’ audit** of household wealth as the pandemic began.
Continuing to work and put themselves at risk, these are the key workers the nation applauded week after week.
There are 8.6 million working in health, social care, essential retail, education, transport and other sectors. For many, their work contributes to precarious circumstances.
They aren’t alone, however. The foundation looks at the relative financial resilience of groups across the wealth and income range as the pandemic began. The balance sheets of better-paid households mean they are likely to be stronger after the pandemic. For less well-off families, including many key workers, the opposite is true.
And as the report explains, wealth, not just income, is really important for resilience.
The audit should be required reading for policy-makers, support charities and others as we emerge from lockdown.
At CARBS we hope what we have learned during the pandemic will lead everyone to properly value essential work and essential workers. Based on its wealth audit, the foundation highlights 3 steps policy makers should take now to mitigate the impact of the Covid-19 downturn on all insecure households:
First, while the impact of the coronavirus crisis on jobs and pay is more visible, it is crucial for policy makers to understand the impact on household balance sheets, because these play a critical role in determining the extent of the hardship that is likely to result both now and in the months to come.
Second, while the impact of the crisis on financial and other asset prices will only become clear in time, its immediate impact on financial wealth risks further widening gaps in net worth between higher- and lower-wealth households. This puts the onus on policy makers to do more to tackle very large wealth gaps once Britain emerges from the crisis.
And third, the lack of adequate financial buffers for many low-income households could pose significant challenges to living standards as the Government phases out its emergency support for family incomes. This highlights the importance of a strong social security safety net for all.
* Critical workers who can access schools or educational settings, Gov.UK, June 2020
** An audit of household wealth and the initial effects of the coronavirus crisis on saving and spending in Great Britain, Resolution Foundation, June 2020
Key Workers: True Value More about making essential work good work.