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The Jobs Retention Scheme / furlough scheme is amazing. I don't think people really get it, they just see it as big businesses being 'bailed out' by the government.
Let me add a few things to consider:
Let me add a few things to consider:
If the JRS wasn't implemented, a lot of these workers would be FIRED:
- No pay for them
- High unemployment figures
- Less money circulating in the economy
- The gov would be paying out ANYWAY (though less) via the welfare system.
- No pay for them
- High unemployment figures
- Less money circulating in the economy
- The gov would be paying out ANYWAY (though less) via the welfare system.
The underlying purpose of this scheme is to KEEP MONEY FLOWING.
If you look at their advertising they're encouraging people to use it whether they 'need' to or not. It's not a 'last resorts bailout' - they WANT people to use it. Reason being that it lessens the impact on GDP.
If you look at their advertising they're encouraging people to use it whether they 'need' to or not. It's not a 'last resorts bailout' - they WANT people to use it. Reason being that it lessens the impact on GDP.
To illustrate, lets say I earn £2,000 a month. Because of how our society thinks, that means I probably spend £2,000 a month too.
If I'm fired and move to £100 a week on benefits, I will spend £1,600 less a month. That's £1,600 less that seller businesses have in their pockets.
If I'm fired and move to £100 a week on benefits, I will spend £1,600 less a month. That's £1,600 less that seller businesses have in their pockets.
As that business takes that £1,600 and uses it to pay another employee, who also spends it, you can see how this cycle is created. The impact of me losing my £2k is a big hit to GDP. Now imagine that on a mass scale.
The JRS ensures that additional 1.6k remains in circulation.
The JRS ensures that additional 1.6k remains in circulation.
A lot of firms are actually BOOSTING the wages of those on JRS as an act of good faith. Since their 2k employee is only costing them 400 they're paying them 2.2k instead (JRS 1.6k, 600 from the company)
The gov could have prevented this. They didn't. Why? More money circulating
The gov could have prevented this. They didn't. Why? More money circulating
Furthermore, it means that I still have a job when corona is done with and so the impact on my employer is lower. No retraining new staff, no spend on recruitment.
The gov want this - it means returning to BAU and a focus on GROWTH as quick as possible - more positives for GDP.
The gov want this - it means returning to BAU and a focus on GROWTH as quick as possible - more positives for GDP.
Ultimately, corona is going to impact our GDP, and the government is trying to minimise that impact as much as possible.
This is what happened in America, who didn't implement something similiar: https://twitter.com/benrileysmith/status/1245787069076602880?s=20
This is what happened in America, who didn't implement something similiar: https://twitter.com/benrileysmith/status/1245787069076602880?s=20
So lets stop blaming Spurs / other big companies for doing exactly what the government want them to do. We need money to circulate.
If we go deep into recession it will hurt us all, but it will hit the poorest far harder than anyone else.
If we go deep into recession it will hurt us all, but it will hit the poorest far harder than anyone else.
