The COVID-19 crisis and universal credit in Glasgow

Abstract

Policy Scotland researchers Dr Sarah Weakley and Dr David Waite today publish a new working paper on the ways that the COVID-19 crisis has impacted unemployment and the labour market in Glasgow, with a focus on how this crisis is illustrated by Universal Credit data. In this paper they begin to chart the interactions between shifts in the labour market and Universal Credit. Within the context of sharp ruptures to the labour market brought about by the closing of large swathes of the economy, this paper hinges, in the main, on reporting the emerging trends that can be observed for Universal Credit in Glasgow. The paper provides a glimpse of the labour market-Universal Credit challenge at a point in time – a point where great uncertainty still prevails – so much further research will necessarily follow this contribution. This paper, nevertheless, raises issues to look out for as further data emerges [1] and we begin to understand the shape of labour market recovery in Glasgow. Key findings: Sharp ruptures to the labour market are already apparent, yet future policy transitions – including businesses resuming activity safely and furloughing schemes ending – may have pronounced effects on employment and unemployment in Glasgow. We consider how these ruptures are illustrated in data for Universal Credit, the primary working age benefit in the UK. In just one month (early March – early April) nearly 18,000 new people came on to the Universal Credit caseload in Glasgow. They had to wait until at least May in order to receive their first payment. The majority of new UC recipients are young workers and families (aged 25-39), who make up the bulk of the UC caseload in Glasgow (nearly 25,000 people). We are beginning to see an emergence of young people who have had to claim UC (under age 25) – these young people are likely facing much more severe hardship than peers who have their families to fall back on in an economic crisis. Given the nature of this crisis future reports may likely see a larger spike in UC for this group. Most of the new UC recipients are those disconnected from the labour market and are now required to work as a condition of their UC payment. However, vacancies are down in the Glasgow local authority by 65%. It is unclear how this context can complement a welfare state predicated on a buoyant labour market for recipients to easily reengage with work or else be sanctioned. Although the initial spike of UC claims passed relatively quickly, there is a distinct concern of a comparable spike in October when the furlough scheme ends. It is therefore valuable for policymakers to consider programmes that will stimulate employment quickly now, before this spike occurs.

Rights

Written content is published under a Creative Commons BY-NC-SA 4.0 licence.

Cite as

Downloadable citations

Identifiers

Repository URI

http://eprints.gla.ac.uk/222582/