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The fairness of furlough: perceptions of Universal Credit claimants

As the Coronavirus Job Retention Scheme comes to an end, this blog by team member David Robertshaw considers ‘furlough’ from the perspective of benefit claimants, drawing on 75 interviews for the Welfare at a (Social) Distance project. The people interviewed were mostly on Universal Credit. This included people who were still attached to their jobs (including a number of furlough recipients), as well as people who were unemployed. It finds a range of attitudes towards the scheme: some felt positive about furlough, while for others it reinforced a sense of vulnerability, exclusion or unfairness.

When people look back at 2020, it seems likely that one key labour market policy will be associated with the period – the Coronavirus Job Retention Scheme (CJRS or simply ‘furlough’). There are good reasons for this – it marked a significant departure from existing social security practice in the UK. For a short time some people got a taste of what European unemployment insurance schemes were like (with more generous ‘replacement rates’ and payments linked to prior earnings). CJRS was in effect a tacit recognition that Universal Credit (UC) would, for many people, be incapable of absorbing shocks to their income during the pandemic.

Since June, the Welfare at a (Social) Distance project has been investigating benefit claimant experiences during the first wave of Covid-19. While our research focuses on mainstream working age benefits such as UC, the topic of ‘furlough’ has frequently arisen. Some research participants were themselves furloughed on low incomes while others had friends or family members on furlough. There was widespread awareness of the scheme and many had interesting thoughts about it. As CJRS comes to an end, we share some of their reflections, providing a timely glimpse into the differences that the furlough scheme made (or didn’t make) to people’s lives.

Disappointments and pleasant surprises

It has been noted that a significant design flaw was that CJRS left “to the employer the exclusive powers to decide who is to be ‘furloughed”, meaning some people received 80% of their former wage, while others were excluded. Zero-hours and agency workers were particularly precarious in relation to the scheme with an absence of contractual protections and limited economic incentives for employers to furlough them. Some of our participants encountered employers who surprised them, and they considered themselves to be relatively fortunate:

“I was very surprised, I didn’t expect that. They put me on furlough which I didn’t really know they would. So that was something good, because I was quite lucky, I think, comparing to what other people are facing”. (female, 30s, charity worker)

Others were to be disappointed. In some cases, the possibility of furlough was ‘kept on the table’, then later reversed, making for a sudden, unpleasant shock. Some participants articulated feelings of being treated as disposable, which was experienced as particularly unfair when other colleagues had been retained under the scheme.

“I was there two months and they fired me because obviously COVID happened. Rather than putting me on the furlough scheme they just totally got rid” (female, 30s, previously in hospitality)

Differential treatment in the workplace

The way people were selected or passed over for furlough sometimes fuelled perceptions of discrimination. One participant related that her husband was offered furlough after raising health and safety concerns (relating to the family’s shielding requirements), but the offer never materialised and he was subsequently made redundant. Another related that their former employer had only selected white members of staff for furlough, which concerningly resonates with recent findings about differential experiences of CJRS, and continuation of jobs after furlough.

“When it did come to the furlough stuff, they [my employer] had told my friend ‘we believe she’d be better off on benefits’ so I think that added to my mentality towards benefits, like am I feeling their racial profiling?” (female, 20s, formerly in hospitality)

Returning to work?

It was common for furloughed employees or their partners to express uncertainty about their future prospects in their workplace. The basis upon which employees were invited to return to work was unclear for one participant, others remained unsure about their likelihood of returning at all. Three who were on furlough already knew that they were going to be made redundant afterwards. In one instance this was connected to changes, effective from September, requiring employers to top up the government’s contribution.

“I just want this year to be done, and I kind of want my furlough to end, because I feel like that’s lingering on, my old job’s still lingering, and I’m not quite sure what I’m – if I’m supposed to be getting any support, or any communication from them. I don’t know what I’m supposed to be getting, and I’m feeling a little bit resentful when I see things on LinkedIn, and social media, and they’re all opening back up, and they’re employing new people, and all this sort of thing, and I’m like, I don’t know how I feel about that.” (female, 40s, previously in hospitality)

Adequacy of Income

As it was paid up to £2,500, there was a widespread perception that the furlough was a generous scheme. The settlement was however less impressive for employees in some of the worst-impacted and low-waged industries. As it was based upon prior earnings, there were significant fluctuations in people’s income from CJRS. One participant was actually better off as their payments had been based upon an earlier busy period. This however was an anomaly, and most experienced a drop in income – It could also reflect periods during which they had been working less than at lockdown. Furlough payments based on part-time work were often experienced as inadequate and one participant noted that their regular overtime had been ignored in the calculation of her 80% payment.

“I am employed on like a zero-hour contract with the hospitality agency, so they actually were able to furlough me after some time, but in the end they were only able to pay me about £300 to £400 monthly, which doesn’t even pay half of my rent.” (male, 20s, hospitality)

From the outside looking in…

Participants who had not qualified for the retention scheme frequently had strong opinions about it, often perceiving furlough recipients as more fortunate than themselves. One speculated that recipients would emerge from lockdown with additional savings. An interviewee who had been receiving benefits for a while regarded CJRS as a reflection of class prejudices, while a new, self-employed claimant, believed the retention scheme ‘felt different’ and was less stigmatising than mainstream benefits.

For my situation, I think it’s a disaster. From what I know of furlough, people have still been able to pay their rent.” (male, 20s, design)
“It’s basically a middle-class thing. Most of the people who have still got their jobs are middle-class. They’re paying them 80 per cent of their wage to do nothing. Before all this started, if you were on Universal Credit or you’ve lost your job, you had to jump through hoops once a month in order to get your £70 a week…” (male, 50s, previously self-employed)

Others were sympathetic to furloughed workers’ predicament. In reflecting upon the shocks to people’s incomes, and prolonged uncertainties around mortgages, they felt lucky. It was also suggested that the experience of furlough could soften attitudes towards other benefit claimants.

“I was actually like, thank god, I’m on benefits, because I’m not being horrible, at least I’m secure. I’ve been on benefits and okay, still I’m worrying about my home, but people that have got a mortgage and then went on to that, that’s a big worry for them. Do you know what I mean? That’s uncertainty…That was one thing I was like, well, ‘wow, I bet no one’s slating the benefits system now!’” (female, 40s, previously in retail)

“I think what’s made me feel better about it is the furlough scheme, if I have to be completely honest, because I’m aware that the government has been funding the salaries of people who work for companies. I think at first, I did feel a bit like, do I really need this? Are there not people that need this more than me?… I feel a lot better about it now because I’m aware that a lot of the country were getting their money from social security, so yes, I feel better about it. I think there was probably some stigma at the beginning that I had in my head about it. (male, 20s, self-employed) Future claimant counts will likely be used as the measure of furlough’s success, but it’s also important to note the scheme’s wider social effects. It did sometimes surprise people with its generosity but it could also undermine feelings of social solidarity. At times, exclusion from furlough fuelled perceptions of injustice and discrimination. The 80% of prior pay was most generous for people who were doing well before the pandemic – for many of the others it simply reproduced existing precarity. The retention scheme occupied an ambiguous position in the wider ‘marketplace’ of support. While many struggled on furlough, it was sometimes viewed as less stigmatising than mainstream benefits. For others it was just another form of social security. Recent findings suggest that British attitudes towards benefits softened dramatically before the pandemic, it remains to be seen whether this trend will continue into the age of Covid-19. Whatever happens, in exploring subsequent trends, we will need to further explore the impacts of the furlough scheme.

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