With Rishi Sunak, the Chancellor of the Exchequer extending the furlough scheme until October, the idea of working from home permanently has started to arise. This is due to realisation that working from home is very possible and more effective than companies originally imagined. Office workers would be granted the chance to miss the busy commute to work, especially in largely populated areas such as London, Birmingham and Manchester and companies will no longer have to worry about covering workers travel costs. The issue of childcare is also eliminated creating the family aspect that we as a nation have arguably lost over time, as well as the chance of catching and spreading Covid being lessened.
However, whilst this decision helps some, it will be damaging on low-income earners such as cafe workers and cleaners. Here’s why:
without the morning commute, coffee and food chains as well as small independent businesses will no longer be in high demand, meaning business closures and large numbers of job losses. An article by CITYA.M. in 2018 highlighted that monthly, Londoners spend an average of £450 a month on work related expenses. This includes, but is not limited to, their morning coffee, breakfasts, lunches and after work drinks. The article states that £175.50 of this money is sent on travel and the rest on food and drink. With around 700,000 people commuting to London to work according to the 2011 census, this is a huge economic loss to cafes and restaurants.
Across the UK 87% of hospitality businesses have said that coronavirus has negatively impacted their businesses and 50% of businesses stating they are worried about being able to pay rent. Global coffee chain Starbucks took a £20million hit this year and have been forced to close down dozens of stores. Pret, a popular London cafe has reported that 1,000 jobs are at risk due to low demand and money losses.
Unemployment due to covid has meant that employees on payrolls have fallen by 730,000, with a surge of 2.7 million people claiming unemployable benefits. Jobs in the hospitality sector have become even more competitive, making vacancies harder than ever to find. The sector alone was the fourth most competitive sector in 2015 with 25.9 applicants per job. Fast forward to 2020, a receptionist job opportunity for a restaurant located in Manchester received a staggering 1,000 applications in just one position.
To continue to have the capital and other major cities like a ghost town is proving to be detrimental to the economy, especially as the transport minister has reassured it is safe to return to offices. To get back to normality as soon as possible may be the only way to truly save the hospitality sector and jobs from being slashed after the furlough period ends.
By E Preston