Not in the last century have we experienced anything remotely close to the Covid-19 crisis. What began as a health crisis now appears to be a full-blown economic catastrophe. As the first wave of the virus passes, we have to start looking at some of the economic impacts this crisis will have in Scotland.
We already know that everyone will be affected in one way or the other; what we do not know, however, is how much it will affect each individual.
First of all, families across Scotland are experiencing financial insecurity. People’s health are threatened while going to work has become difficult. Freelancers, self-employed people, and those reliant on statutory sick pay are affected as well. People are losing their jobs, having their work hours reduced, and feeling the heat already.
According to a recent survey by Standard Life Foundation, one out of every two UK households are worried about their finances. With huge parts of the economy being decimated, their worries are justified.
The UK government’s Jobs Retention Scheme offered encouragement last month when it paid 80 percent of wages across different industries. With payment also coming this month, employers and families under pressure have been able to breathe easy for a while.
Inside 48 hours of the scheme opening, employers made 2.2 million applications, while the total number of employees enjoying the scheme is bound to reach 8 million within the month. There are fears of a significant drop in earnings for 40% of applicants if numbers continue to rise.

Increased furlough and unemployment in Scotland
It is anticipated that over the next few months, an estimated 750,000 employees in Scotland will be enrolled on the Jobs Retention Scheme, while at least 150,000 jobs are anticipated to be lost. These numbers are not expected to be even across Scotland since different sectors face varying prospects. It is expected that Scotland’s lowest-paying sectors suffer the most.
In the retail and wholesale sector, an estimated 31,500 jobs should be lost, with 142,000 workers put on furlough. In the food and accommodation sector, an estimated 31,000 jobs should be lost, with 140,000 workers put on furlough. In the healthcare sector, however, no job losses are anticipated, with an estimated 14,000 jobs to be created.
The hospitality and tourism sector is not spared. At least 8 out of 10 employees are expected to lose their jobs or enter furlough. For workers in this sector, as well as of those in the food and accommodation services, a 20 percent pay cut will be gruesome.
Employees in the retail sector are at relative risk, even though their jobs are not secure. One out of two employees is still expected to be affected by job loss or furlough. While, the insurance and finance sectors, where employees are paid higher appear to be well insulated from the economic fall-out of the coronavirus.
What these statistics simply show, is that workers in Scotland and the UK at large with higher earnings and greater security will not suffer as much as those in the lower-paying sectors.

Financial security going into the crisis
According to statistics, one in three workers in the hospitality and tourism sector said they were under immense financial pressure; for workers in the construction sector, it is nearly one in three.
Individuals that are already struggling with financial insecurity with the ongoing crisis dread the possibilities of having their earnings cut or losing their jobs. With the rising costs of energy and food bills and an increased risk of illness adding a strain on families, the mounting pressure on workers is understandable.

The aftermath of the impending furloughs
There is a growing fear that after the withdrawal of the emergency support, and the end of all furlough schemes, a huge number of workers experiencing furlough may be redundant. This means that a mini crisis in household finances is brewing.
How the UK and Scottish government handles this crisis will be of particular interest going forward, even as it threatens to blow over.
The dream will be to see significant support continue to protect sectors and households across Scotland from extreme hardship and financial insecurity when the emergency support ends.
The general belief is that, before the crisis, the UK government erred when they pushed the risk onto those who could least bear it. The consequences have been exposed by the crisis. With focus turning towards the economic burden of the crisis, pressure has to be put on the UK government, for the provision of adequate safety measures.
The recent doubling of the Scottish Welfare Fund is a welcome sign, while inside the coming weeks, Westminster and Holyrood government will need to make fast decisions to strengthen financial security to prevent some of the UK and Scotland’s households entering into depression.