According to the Resolution Foundation, the next phase of the lockdown exit may trigger a large outflow of workers from the hardest-hit sectors. Within the context, the authorities should minimize those outflows and maximize the inflows to work in other parts of the economy.
"The Government should introduce a Job Protection Scheme (which would subsidise up to 10 per cent of wages in those hardest-hit sectors) to reduce labour costs and therefore the scale of redundancies when the Jobs Retention Scheme comes to an end. Otherwise, we fear the result will be mass redundancies, and an even worse unemployment crisis," the Resolution Foundation said.
At the same time, according to the think tank, the authorities should extend the Job Retention Scheme, which compensates the wages of employees who are unable to work due to the pandemic through the autumn in the hardest-hit sectors before replacing it with the Job Protection Scheme.
In addition, the think tank said that the government should "invest in direct job creation in social care and home retrofitting, which would create jobs in all parts of the country." The private sector can also be encouraged to increase hiring, the Resolution Foundation added.
As of now, the Job Retention Scheme is set to close to new entrants on Wednesday and will be shut entirely at the end of October.