While supermarket workers get extra praise, their bosses get extra pay

Cashing in on coronavirus is a bad look. Supermarkets have seen a surge of as much as 50% in sales, reports Pensions & Investment Research Consultants (PIRC), which scrutinises companies’ good governance. Yet supermarkets have been gifted millions in a business rates holiday windfall that they need least.

UK corner shops and independent grocers ring up 63% rise in sales

David Potts, the CEO of Morrisons, and Trevor Strain, its chief operating officer, are set to take a 24% pension contribution, in direct opposition to a corporate governance code that says their rates should be aligned with those of their workers. Morrisons staff – the ones putting their lives on the frontline – are only getting 5%. Let’s hope someone at the company’s AGM next week voices a modicum of protest.

Meanwhile Tesco is expected to clock up £300m extra profit thanks to Covid-19. Its CEO is taking an extra 25% cash payment on his £1.25m salary, holding out for a performance-related bonus, while Tesco frontline staff get just a 7% contribution to their workplace scheme. Tesco recently paid out £635m in dividends to shareholders while receiving a similar sized tax-break from the government’s emergency coronavirus support package. 

And the phenomenal share option taken by Ocado’s top executives amounts to £88m – while the pay ratio from boardroom to average staff wage is a staggering 2,605%, says the High Pay Centre. It’s worth noting, wryly, that Ocado’s top three executives take 1% of the company’s value, but are met with rather less public outcry than when John McDonnell proposed companies should put 1% of their value into a fund for their entire workforce.

While supermarket workers are rightly praised for heroism, putting their lives on the line during this pandemic, a public affection for their company’s brand may wane when people hear that those same companies are awash with cash. Shoppers notice price rises and the absence of three-for-two special offers as they count pennies out of shrunken incomes. Why let off supermarkets from paying business rates when the state, as the country heads into a dark recession, will need all the tax it can raise?

Yesterday, the Bank of England published the list of large companies using coronavirus corporate financing facility loans. There are conditions attached: the money must not be paid out in dividends, or be used for share buy-backs or executive pay rises. But these are modest terms: in a recent letter to the chancellor, Margaret Hodge, chair of the all party parliamentary group on responsible tax, calls for far bolder action “to stop these bailout schemes from being abused by shameless companies”.

HM Revenue & Customs rates companies according to their level of risk on tax non-compliance: high-risk companies should be denied bailouts, Hodge says. Companies avoiding tax by exporting profits via intra-company loans to low-tax countries should be barred. Expect this list to be thoroughly scrutinised to shame those using legal but indecent schemes to cut their tax bills, by invaluable campaign groups and thinktanks such as TaxWatch, Tax Justice UK, PIRC and the High Pay Centre.

The chancellor will need to raise taxes one way or another. This crisis should prompt the Treasury to get serious about collecting all taxes avoided and evaded. The Treasury says it loses £35bn in the “tax gap”, defrauded by cheats. Now, as their profits boom in lockdown, we should be clamping down on all the tech companies that log UK profits in havens or low-tax countries.

Time, too, to shut down personal service companies used by many to disguise their income as lower taxed dividends and capital gains. In a paper for the Institute of Fiscal Studies, Dr Arun Advani  finds an astounding 40% of lawyers, including partners in top firms, pay themselves this way. Time also to return to the one wise act of Margaret Thatcher’s chancellor, Nigel Lawson: he made all income taxable at the same rate whether from earnings, dividends or capital. Time to finally stamp out this non-dom tax-avoiding nonsense.

HMRC should also make a strong plea to restore its depleted forces. One of the most perverse austerity cuts was in its workforce, which was cut by thousands of inspectors. It had to close many offices, losing local knowledge (there are now no offices west of Bristol). Random audits by tax inspectors, checks that are proven to improve peoples’ behaviour thereafter, have fallen by a third since their peak in 2002. With no local offices to give free advice, people are being pushed into the arms of unscrupulous accountants peddling tax-avoidance plans. Even now, those returning to work in the NHS are being targeted by tax-cheat advisers with clever ways to disguise most income as loans. HMRC’s warnings on its website are likely to reach many fewer than this scheme’s pluggers on social media.

There are hopes that the chancellor, Rishi Sunak, will get tough on tax evasion. He has hinted that he would abolish the lower national insurance rate paid by the self-employed: when Theresa May suggested the same, all hell broke loose, but these are very different times. Now is the time to sweep away all loopholes and scams, in the name of this emergency. Some small-time cash-in-hand merchants will have found the down side of failing to pay tax: with no tax records they can’t draw any compensation. 

But the real serves-them-right pleasure is the absurd sight of the private equity vultures now complaining they are excluded from bailouts because they register losses, as loading up with debt is their tax avoiding mechanism. Public sentiment has always strongly favoured clamping down on tax cheats and making the richest pay their fair share. Any companies profiteering from coronavirus will get short shrift: no better time for the Treasury to abolish avoidance and take in all the money that is due.

Polly Toynbee is a Guardian columnist

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America begins to unlock for summer – but is it inviting a disastrous second wave?

Monday is Memorial Day – the traditional start of the American summer. Shutters are going up, doors are being unlocked, barriers removed. Every state is relaxing quarantine rules to some extent, betting that the country finally has Covid-19 under control.

There are signs that for some Americans quarantine fatigue is overcoming fear of infection. With the economy reeling, others have dismissed the pandemic as a political plot – for them relaxing quarantine rules can’t come soon enough. But people on the front line are worried, and experts warn the outbreak has proved a “trust-destroying disaster” that could have devastating consequences.

No masks allowed: stores turn customers away in US culture war

On Friday, White House coronavirus taskforce member Dr Anthony Fauci said new localized outbreaks were “inevitable” as mitigation measures are relaxed. He said a full-blown second wave could be avoided if the holy grail of containment measures – testing, quarantine and contact tracing – continued to be adhered to.

Fauci said he was hopeful that the US would be ready, though a recent study by Harvard University found that only nine states were conducting, or near to conducting, the minimum recommended testing. Hours after Fauci spoke, Donald Trump ignored health guidance and ordered houses of worship to open for in-person services at the weekend.

These disparate responses to the pandemic are not just happening in the White House, but across America.

After 51 days on lockdown, Minnesota ended its statewide stay-at-home order on Monday. A new order, dubbed “Stay Safe MN”, will allow more flexibility and social interaction amid the pandemic.

For nurses in Minneapolis, it’s too soon. In emotional testimony at the state Capitol last week, they told lawmakers they feared that a surge in cases would cost more lives, including those of health workers.

A surge of Covid-19 infections would exhaust the state’s personal protection equipment (PPE) supplies, warned Mary Turner, a critical care nurse at North Memorial Health Hospital and president of the Minnesota Nurses Association.

“We are approaching the surge point very fast,” Turner said.

Some 17,700 cases have been reported in the state, and 777 deaths. It is far from the worst outbreak in the US – but numbers are still rising. In the meantime, hospitals have been reusing N95 masks that technically expired in 2001 and 2002. Supplies of gowns ran so short last month that some local hospitals ordered rain ponchos as a backup.

Even governor Tim Walz believes worse is to come. “It is going to get worse here before it gets better. That is an absolute guarantee,” Walz, a Democrat, told reporters as he outlined his cautious reopening plan.

Social scientists at Northwestern University have surveyed 200 people per day since mid-March, and have found that unlike in other disasters, the US is not unifying in response to this crisis.

“It has been a solidarity- and trust-destroying disaster,” said Beth Redbird, the primary researcher. “We usually see disasters as unifying. They bring us together, they unite us, they increase support for our neighbors, to help each other out. But while we see anecdotal stories of that in the press, we haven’t actually seen a lot of data supporting that that’s what’s going on.”

The majority of Americans still seem to oppose Trump’s attempts to downplay the crisis. Northwestern’s surveys last week showed 64% of people are still in support of stay-at-home orders, and they are mostly avoiding seeing friends and eating out at restaurants.

But while Northwestern’s survey found 86% said they trusted scientists to tell them what to eat for a healthy diet, those who said they trust a scientist to tell them how Covid-19 works was only at 55%.

‘Like adding kindling to embers’

We have been here before. The threats of a second wave were borne out in the 1918 influenza pandemic, in which a third of the world’s population were infected with the virus.

The spread was successfully curtailed in San Francisco thanks to the prompt implementation of mitigation measures including a city-wide shutdown and requirement to wear masks in public.

As the infection rate dwindled, city leaders relaxed the lockdown measures in November 1918; bars, restaurants and sports arenas reopened, and people poured out onto the streets in celebration, tossing their masks in the process. A month later, the second wave hit San Francisco, but this time much of the public – including the Anti-Mask League – resisted public health mandates. The city ended up with nearly 45,000 cases and over 3,200 reported deaths. San Francisco ended up being one of the country’s worst-hit major cities.

Stephen Morse, director of the infectious disease epidemiology program at Columbia University medical center, said as long as the virus is circulating in humans, there will be flare-ups as soon as it’s introduced to a street, town or county with enough susceptible people.

“It’s like adding kindling to embers,” said Morse.

Whether these inevitable localized outbreaks are contained or will multiply depends on the golden trio of testing, quarantine and contact tracing. If enough places implement these measures comprehensively, the chain of transmission could be broken, and the flare-ups snuffed out.

“We don’t know what’s going to happen next, we have to proceed with caution and we could get lucky,” Morse said. “The big fear is that with the virus still in circulation, if we allow it to have unfettered access to people, then we certainly have the makings of a second pandemic of even larger proportions.”

It’s not all about timing. The country’s patchwork response to the outbreak has also played an important role – and will likely continue to do so.

“For the first time in my lifetime, there’s been an almost total lack of global coordination and US federal leadership, whose confusing and contradictory messages have been counterproductive and very destructive,” Morse said.

‘To think the virus has changed is a fantasy’

It’s unclear whether the US has even fully emerged from the first wave, but the virus remains as infectious and lethal as it was when it emerged.

And the conditions that have left low-income groups, communities of colour and Native Americans the hardest-hit remain, with infections and complications including death.

“To think the virus must have changed just because we’re tired of being at home is almost a fantasy,” said Chandra Ford, founding director of the center for the study of racism, social justice and health at UCLA’s Jonathan and Karin Fielding school of public health.

Ford warned subsequent outbreaks are likely to disproportionately affect these same communities.

“The US response to the pandemic at the federal level has lacked a meaningful public health response,” said Ford. “So it’s not surprising that the push to reopen isn’t driven by public health indicators. In fact, it appears to be driven against public health indicators, in the interest of political or economic gains.”

From the beginning, the Centers for Disease Control and Prevention’s most basic guidelines to stem the spread of Covid-19 ran up against some fundamental injustices in the US system. Workers are not guaranteed paid sick leave and healthcare is not universal.

Prisons, meatpacking plants and nursing homes have seen a disproportionate amount of cases. In New York City, the impact has overwhelmingly been felt in poorer communities where mostly immigrants and people of color live.

“Historical and current experiences of discrimination and medical racism provide fodder for people to be willing to accept explanations that are not true,” Ford said. “Trust matters tremendously. Mistrust of healthcare providers and public health messages will fuel the pandemic itself and disparities in the pandemic.”

In Georgia, one of the first states to start reopening, even business owners are worried.

Brian Maloof, owner of the Atlanta’s famous Manuel’s Tavern, said: “The attitude is that it’s too early to open with the population density. This is where the predominance of the cases are.”

He lives in the outskirts of the city and said there, parking lots are jammed with cars and people are packing into shopping malls and restaurants. He doesn’t expect the same crush of people inside the city. Maloof said: “There is a tremendous amount of fear here in Atlanta.”

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Vulnerable not exempt from furlough winding down, employers told

Government wage subsidies for disabled and vulnerable workers could be drastically scaled back from August under Treasury plans to wind down its Covid-19 furlough scheme, employers’ groups have warned.

Charities and social enterprise employers have been told by the government that its plan to bring the coronavirus job retention scheme to an eventual close this autumn does not currently include an exemption for vulnerable workers.

Rishi Sunak, the chancellor, announced last week that the furlough scheme – under which the government pays 80% of staff wages up to £2,500 a month – would be extended until October. However, state support will be scaled back from August, with employers expected to contribute to maintain a wage packet of at least 80% for furloughed workers.

Although a final decision has yet to be taken, the chancellor is believed to favour a universal approach to scaling back the scheme for all employers, without tailoring it to reflect a gradual return to work for firms and workers.

Despite UK furlough scheme 6 million fear losing their job – study

Business groups and Labour have however warned that a blanket approach could trigger widespread job losses in sectors of the economy where Covid-19 restrictions are kept in place for longer – such as in pubs, theatres and restaurants – or for firms with higher numbers of vulnerable staff.

Anneliese Dodds, the shadow chancellor, said: “If we see all sectors being lumped together in this way, and we also don’t see a differentiated scheme for particularly vulnerable workers, then we’ll see a very major spike in unemployment. That’s what all the evidence I’ve seen seems to suggest. I’m concerned we don’t have that recognition from the government yet.”

Faced with spiralling costs for the public purse with more than 7.5 million workers across the country currently benefiting from the system, the Treasury is exploring options to wind down the scheme as it gradually lifts lockdown restrictions. The scheme is currently costing about £14bn a month.

Sunak told parliament on Monday that he would provide an update by the end of the month. “We’re in deep consultation with both unions and business groups to make sure we get the design of the second part of this scheme right. It’s right both for the economy and indeed for the taxpayer to ask employers to make a contribution to paying the wages of their employees,” he said.

However, Social Enterprise UK, which represents thousands of charities and social enterprises, said it had been warned by Downing Street not to expect tweaks to the scheme to support vulnerable workers following talks with No 10.

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The trade body has written a letter to Sunak alongside other groups representing more than 100,000 social enterprises – including Co-operatives UK and the Disability Business Forum – to warn this would raise the risk of redundancies for the most vulnerable people in society.

Lord Victor Adebowale, chair of Social Enterprise UK, said: “Without flexibility in the winding down of the furlough scheme, the good work that has been done in recent years to help disabled people, those recovering from addiction and helping ex-offenders back in work could be undermined.

“These workers could take years to get back into work with a huge impact on their wellbeing as well as creating higher costs to the taxpayer.”

The government has told 2.5 million people to shield from coronavirus, with hundreds of thousands of these people in employment. Research from University College London estimates as many as 8 million people with underlying health conditions could also be at risk when going to work and should also be shielding.

Among charities that could suffer from a cut in support is Britain’s Bravest Manufacturing Company – part of the Royal British Legion Industries charity founded in 1919 for troops returning from the trenches of the first world war – which employs vulnerable and disabled veterans.

The firm, which makes road and railway signs, and supported the Social Enterprise UK letter, has furloughed more than half of its 130-strong workforce since the onset of the coronavirus outbreak.

Kate Bull, managing director, said it was not yet safe to bring her most vulnerable staff back to work. Warning that sales had slumped and costs could rise dramatically if the government subsidy is cut, she said: “It could have a very serious effect. We sit under a charity, and the charity’s aim is to support people for whatever we can. It would be as a last resort that we would seek to make people redundant.”

A spokesman for the Treasury said: “The scheme will continue in its current form until the end of July, before becoming more flexible to support the transition back to work.

“We appreciate that many are nervous, which is why we are examining how we can best support individual needs during this process. Details will be made clear at the end of May.”

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UK fashion industry pleads for more aid to survive Covid-19 crisis

The British fashion industry has called for more financial aid from the government amid fears that Covid-19 crisis could wipe out half of the sector.

On the day the British Fashion Council (BFC) announced the recipients for its £1m emergency fund, the organisation said the amount was meagre in light of the sum needed to help small, independent fashion companies.

“£1m sounds like a lot of money, but when you split it among so many businesses, it is just a drop in the ocean,” Caroline Rush, the BFC chief executive, told the trade website Business of Fashion. “Much more needs to be done.”

Alongside the threat of closure, fashion designers have experienced massive financial losses from production changes, cancelled orders and rescheduled catwalk shows. Retailers have suffered an 80% decline in footfall, its “greatest ever” drop, in the four weeks between 5 April and 2 May.

Thirty-seven labels, including Craig Green, Bethany Williams and Ahluwalia, are due to receive the financial help from the BFC Foundation Fashion Fund of up to £50,000 each. “It will allow our team to have stability during this time,” said Eden Loweth, of Art School, one of the recipients of the fund. He added that the money will be used to “invest in our direct team of assistants and manufacturers, supporting them and therefore the company infrastructure over the course of the coming months.”

The pandemic has forced the fashion industry to question how it operates. An open letter by the designer Dries Van Noten and signed by other designers, executives, retailers and industry figures has called for the production of fewer goods, less travel for fashion weeks and a realignment of seasonal deliveries and sales periods.

“I think this is a watershed moment for the whole industry,” said Loewth. “Things simply won’t ever go back to how they were before.”

“[The pandemic] has made designers look at what is really necessary,” said Bianca Saunders, who is also receiving money from the BFC fund. “We’ve had to essentially rip up the rule book and come up with whole new ways of doing things, from production of collections, through to the shows and marketing side of things.”

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For Saunders this has meant developing e-commerce and becoming independent. “As much as I am thankful for the incredible support from my stockists, I need to be able to stand on my own two feet also,” she said.

With digital fashion shows taking place instead of physical ones, the nature of catwalk events is set to change for ever too. “We’ll see some exciting innovative ideas from designers come June and beyond as a result of this,” said Saunders, “that’s one positive I would take from it. Out of adversity, comes creativity.”

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Deliveroo was the poster child for venture capitalism. It’s not looking so good now

If any company can weather coronavirus well, it should be Deliveroo. The early days of lockdown saw demand surge for the service delivering food from restaurants and takeaways. The decision by several major restaurant and fast-food chains to shut for weeks during the early stages of lockdown might have dented demand, but as they begin to reopen for delivery – with most other activities still curtailed – prospects would seem bright for the tech company.

The reality looks quite different. Earlier this week, Deliveroo was reported to be cutting 367 jobs (and furloughing 50 more) from its workforce of 2,500. Others seem to be in similarly bleak positions – Uber is said to be discussing plans to let go around 20% of its workforce, some 5,400 roles. The broader UK start-up scene has asked for – and secured – government bailout funds.

Why Deliveroo is struggling during a crisis that should benefit its business model tells us about much more than just one start-up. The company’s nominal reasoning for needing cuts is that coronavirus will be followed by an economic downturn, which could hit orders. That’s plausible, but far from a given.

The financial crash of 2008 – which led to the most severe recession since the Great Depression – saw “cheap luxuries” perform quite well. People would swap a restaurant meal for, say, a £10 Marks & Spencer meal deal. Deliveroo is far cheaper than a restaurant meal for many people – there’s no need to pay for a childminder, or travel, and there’s no need to purchase alcohol at restaurant prices. Why would Deliveroo be so certain a downturn would be bad news?

The answer lies in the fact that Deliveroo’s real business model has almost nothing to do with making money from delivering food. Like pretty much every other start-up of its sort, once you take all of the costs into account, Deliveroo loses money on every single delivery it makes, even after taking a big cut from the restaurant and a delivery fee from the customer. Uber, now more than a decade old, still loses money for every ride its service offers and every meal its couriers deliver.

When every customer loses you money, it’s not good news for your business if customer numbers stay solid or even increase, unless there’s someone else who believes that’s a good thing. What these companies rely on is telling a story – largely to people who will invest in them. Their narrative is they’re “disrupting” existing industries, will build huge market share and customer bases, and thus can’t help but eventually become hugely profitable – just not yet.

This is the entire venture capital model – the financial model for Silicon Valley and the whole technology sector beyond it. Don’t worry about growing slowly and sustainably, don’t worry about profit, don’t worry about consequences. Just go flat out, hell for leather, and get as big as you can as fast as you can. It doesn’t matter than most companies will try and fail, provided a few succeed. Valuations will soar, the company will become publicly listed (a procedure known as an IPO) and then the company will either actually work out how to make profit – in which case, great – or by the time it’s clear it won’t, the venture capital funds have sold most of their stake at vast profits, and left regular investors holding the stock when the music stops.

This is a whole business model based on optimism. Without that optimism, and the accompanying free-flowing money to power through astronomical losses, the entire system breaks down. That’s the real struggle facing this type of company. It’s also why the very idea of bailing out this sector should be a joke: venture capital chases returns of at 10 times their investment, on the basis that it’s high risk and high reward. If we take out the element of “risk”, we’re basically just funnelling public money to make ultra-rich investors richer.

What pushes this beyond a tale that many of us might be happy to write down to karma, though, is the effects it has well beyond the rest of the world.

I’m a delivery rider with suspected coronavirus. I haven’t received a penny in help | Greg Howard

Tech giants move in on existing sectors that previously supported millions of jobs and helped people make their livelihoods – cabs and private hire, the restaurant business, to name just a few. They offer a new, subsidised alternative, that makes customers believe a service can be delivered much more cheaply, or that lets them cherry-pick from the restaurant experience – many restaurants relied on those alcohol sales with a meal to cover their margins, for example.

These start-ups come in to existing sectors essentially offering customers free money: £10 worth of stuff for a fiver. It turns out that’s easy to sell. But in the process, they rip the core out of existing businesses and reshape whole sectors of the economy in their image. And now, in the face of a pandemic, they are starting to struggle just like everyone else. It’s not hard to see how this sorry story ends. Having disrupted their industries to the point of leaving business after business on the verge of collapse, the start-ups could be tumbling down after them.

James Ball is the global editor at the Bureau of Investigative Journalism

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Experts warn of mental health fallout from mass US unemployment

The US faces a catastrophic rise in unemployment following the forced shutdown of businesses across the country to stop the spread of Covid-19 – and experts are warning it could trigger a severe mental health crisis.

In just two weeks, more than 9.95 million Americans have applied for unemployment – smashing all records. Economists are predicting the unemployment rate could rise as high as 30% as the pandemic sweeps across the country.

Coronavirus batters US economy as 6.65m file for unemployment last week

Those hardest hit are likely to be the poorest, including many people of color, and those who benefited least from the last economic boom.

“With a 30% national unemployment rate, the impact will be devastating for everyone. But it will be particularly crushing for black Americans,” said William Darity, a professor of economics at Duke University and co-author of a study that found black Americans with no history of mental health diagnoses were more likely to have depression, anxiety or post-traumatic stress disorder during the 2007-09 Great Recession.

To mitigate the effects of the massive wave of unemployment, Congress has passed a $2.2tn stimulus package to help everyday Americans. The bill includes a payment of up to $1,200 to most taxpayers and $250bn to buffer unemployment insurance – an additional $600 to those who qualify for unemployment for up to 12 weeks.

But beyond the dollar signs, economists are worried about the long-term effects that being unemployed will have on Americans’ mental health – a problem that will further highlight the cracks in the country’s safety net and healthcare system.

It may seem cliche but work is not all about the money, and research proves it. “People want to work. They want to do meaningful things,” said Art Goldsmith, a professor of economics at Washington and Lee University who has researched the psychological effects of unemployment.

Although Goldsmith noted there is evidence that people experience a brief period of optimism when they are first let go from their jobs – they find they have more time to do other tasks, like cleaning out a garage – dangerous feelings of pessimism can set in after four to five weeks of unemployment.

“As the weeks go on, and we see the economy struggling, I think there will be more pessimism. I worry the emotional footprint of this experience can be quite large,” Goldsmith said.

A $1,200 check from the government and stronger unemployment insurance benefits will help Americans in the short term to pay their bills and other essentials but it cannot replace the value of having a job.

What US unemployment benefits can I get during the coronavirus? Your payment options explained

“People who have meaning and purpose in their work have much, much higher levels of wellbeing than other people,” said Carol Graham, a senior fellow at the Brookings Institution and a professor at the University of Maryland. “People will trade off money for doing work they care about and doing work where they have respect and autonomy.”

The effects of unemployment on mental health are long-lasting. An Association for Psychological Science study published in September 2019 found that those who experienced financial, housing or job-related hardship during the Great Recession were more likely to have depression, anxiety or substance abuse as many as three years after the recession. A poll from Gallup conducted in 2014 found that unemployed Americans were more than twice as likely to self-report being treated for depression.

Economists are particularly concerned about people who were disenfranchised before the crisis started.

Black Americans historically have an unemployment rate that is twice as high as the overall rate, even in a healthy economy.

The overall median wealth for a black family is 10 times less than the median wealth of a white family. Discriminatory job processes have kept black Americans in low-paying jobs, many of which have seen layoffs with Covid-19. “From the standpoint of providing for oneself and one’s family, the situation is already significantly less secure for black Americans.”

While the mental health toll from unemployment is shared across the globe, America’s weak safety net and lack of affordable healthcare exacerbates the consequences for unemployed Americans.

Economists have shown that unemployment and low wages have literally fatal consequences for Americans. In 2015 Princeton economists Anne Case and Angus Deaton, winner of the 2015 Nobel prize for economics, found middle-aged white Americans were more likely to die in mid-life than their parents – reversing decades of steadily increasing life expectancy.

They coined the term “deaths of despair” and blamed the rise on suicide, drug overdose or alcohol-related liver disease.

Their research found geographic and class-related underpinnings to the rise: places that have a smaller fraction of working-age people in jobs are more likely to have higher rates of deaths of despair.

The people dying were overwhelmingly white working-age Americans without college degrees. That group of people were finding that their jobs were being valued less than previous generations by the American economy – they were working for lower wages, inflexible hours and fewer benefits. Many lost jobs to changing technology.

Exacerbating the problem has been easy access to addictive opioids and firearms (more than half of suicides in America are committed with a firearm). “We all but load the weapons of self-destruction for people in misery,” noted surgeon Atul Gawande in the New Yorker.

This economic and mental health crisis will only be deepened by the sudden rise in unemployment. And, in the meantime, many Americans face barriers to getting mental healthcare. While health insurance can offset the cost of therapy and access to a psychiatrist, Americans typically rely on an employer for health insurance and lose access if they are laid off. About 28 million Americans do not have health insurance at all.

Cities typically do not rely on a single firm to keep people employed. If a major company shuts down, people can typically find employment elsewhere. But with huge sectors of the service industry – restaurants, hair salons, hotels – shutting down amid the pandemic, the mental health toll of this recession is likely to cast a wide net.

“What’s going to happen to low-skilled, support sectors in the cities if this lasts really long? We’d have whole different population cohorts we haven’t seen before that may also suffer some severe mental health crises,” Graham said.

“I’m not saying we shouldn’t social-distance – we have no choice. But we really need to think about the mental health part of this crisis as much as the economic one.”

In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. In the UK the Samaritans can be contacted on 116 123. In Australia, the crisis support service Lifeline is on 13 11 14. Other international suicide helplines can be found at befrienders.org

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Coronavirus is shining a light on the wretched universal credit system

British governments are notoriously bad at recognising a crisis until it impacts them, or their class, directly. London’s pioneering sanitation system was not developed until the cholera epidemics of the early 19th century had reached parliament’s windows, with the “Great Stink” wafting in from the Thames. Similarly, now that the middle classes are sharing the same unemployment line as the people who serve them their morning lattes, welfare reform has become a priority.

Nearly a million new universal credit (UC) claims have exposed the government’s boasts about the UK being the “jobs factory of Europe” for the thinly veiled lie that it is. Yes, last year UK unemployment fell to its lowest level since January 1975; and the Office for National Statistics found that the UK employment rate in the three months to January 2020 was at a joint record high of 76.5%. But this all looks less fantastic when you dig a little deeper into those figures. Almost 1 million workers are on zero-hours contracts, which means there’s no guarantee that the individuals who comprise those stats are the same from one day to the next.

The middle class are about to discover the cruelty of Britain’s benefits system | Polly Toynbee

Workers in the gig economy are easily hired. It’s also never been easier to fire them, and (big surprise) that’s exactly what employers are doing during the lockdown. Almost 5 million self-employed workers soon found themselves in the same boat, without a clue about where their next paycheque would be coming from. Now a million of those workers are leaning on the Department for Work and Pensions (DWP) for help.

UC has been riven with dysfunction since its inception. Long waiting times between initial claims and first payments have driven many people into debt, causing them to prioritise food and bills over their rent. Compounding this is the draconian sanctioning system that has left many penniless over things like arriving a few minutes late for an appointment. Destitution is often the consequence, with up to 65% of local authorities saying that UC has contributed to homelessness in their community.

This has gone largely unnoticed by the general public over the years, but the coronavirus pandemic has brought it into focus, and has revealed the true fragility of our social institutions. At the beginning of this crisis, chancellor Rishi Sunak darted back and forth like an exasperated shopper who keeps misplacing their grocery list, announcing half-measure after half-measure in a desperate attempt to put a tourniquet on the country’s haemorrhaging economy.

Sunak announced a package of emergency measures to compensate employers, then he remembered employees a few days later. Then landlords got a mortgage holiday, but no such luck for tenants until the chancellor remembered them after another few days. Sunak also completely forgot about the millions of self-employed workers who were left with no means of income until, true to form, he remembered their existence days later.

The confusion has overwhelmed the welfare system. Over nine days in March, almost 500,000 people made a claim for UC. Now, almost a million claims have overwhelmed jobcentres, causing the DWP to reassign 10,000 workers to process claims.

People may be surprised to learn that I’m one of those claimants. I’m a journalist who writes for national newspapers and I’ve even been fortunate enough to receive awards for my writing. You might ask: why am I depending on the welfare system for support?

I’m a freelancer, which means, like many people working on precarious employment contracts, I cannot predict my income from one month to the next. Some months I do OK, during others I worry about paying my rent on time. Twenty years ago my job may have afforded me more financial stability, but due to the high cost of living, extortionate rents and stagnating wages, I’m living paycheque to paycheque in cramped shared housing.

I was told by my jobcentre adviser that, due to the lockdown, I wouldn’t be expected to seek employment, attend appointments and jump through any other hoops that claimants are usually confronted with. The logic is sound: people can’t work, so they can hardly be expected to look for it. Why can’t some of this compassion be brought into the process in ordinary times?

Just like the million people claiming UC in lockdown, unemployed people in ordinary times are not the workshy shirkers depicted by some newspapers. Most are unemployed due to disadvantage or lack of opportunity. Most would prefer to be earning a decent living over depending on meagre benefits, paid to them by a system determined to catch them out at every turn.

The notion that lots of people are a missed payslip away from poverty has been a well-worn trope over the last decade. Hopefully, with a million new UC claimants, doubters will stop rolling their eyes when they hear it.

Daniel Lavelle writes on mental health, homelessness and social care

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