Is there a case for a permanent furlough scheme?
Jon Boys investigates the case of whether the UK should have a permanent furlough scheme, even after COVID-19.
CIPD Voice: Issue 29
David Smith of The Times argues that furlough has been so successful in keeping unemployment low compared with previous recessions, that the political pressure to use furlough in the next downturn will be strong.
The current low rate of unemployment
The current low rate of unemployment is a bit of a statistical technicality. Those on furlough are simply classed as “employed” by official statistics. Compare this to the situation in the US where instead of furlough, they had an enhanced unemployment benefit. The unemployment rate there jumped from around 4 to 15% - about three times the rate of the UK. The material situation of people in both countries was the same. The state was supporting them not to work.
For this reason, we should be wary of being too excited about the low unemployment rate, which currently stands at 4.8%. We should consider those on furlough as being in an ambiguous quasi-employed/unemployed state. There were approximately 3.5 million people still on furlough at the beginning of May, according to the latest count from HMRC. Over 10% of the workforce. Moving them successfully back into work is the real challenge of the next few months. Some are surely furloughed from ‘zombie jobs’, which are now unviable.

Jon Boys: Labour Market Economist
Jon joined the CIPD in January 2019 as an Economist. He is an experienced labour market analyst with expertise in pay and conditions, education and skills, and productivity.
Jon primarily uses quantitative techniques to uncover insights in labour market data, both publicly available and generated through in house surveying. Jon regularly contributes commentary and analysis of economic issues on the world of work to online, print and TV media. Recent work includes the creation of an international ranking of work quality, analysis of firm level gender pay gap reporting data, and an ongoing programme of work looking at the changing age profile of the UK workforce.
Prior to this he worked for Be the Business – a government backed start up aimed at increasing firm level productivity in the UK, the Careers & Enterprise Company – another government backed start up aimed at transforming careers provision in school. He has also held prominent research roles at an Employers Association and Trade Union researching pay, conditions, and workforce composition.