Despite the sustained success of the British labour market, workers feel increasingly insecure. This is partly due to the increased financial consequences of losing employment today. At present, neither the state nor the private market provides an adequate response to this.
This report argues that government, in cooperation with the private sector, can and should provide a safety net for the vulnerable middle class to counteract this trend.
The authors sketch out a way to do this by significantly increasing access to insurance against the risks of unemployment among those facing the greatest financial fragility, in part through auto-enrolment in such insurance. Since this approach has been shown to significantly increase take-up of financial products elsewhere, it is expected to be successful in unemployment insurance too.
Some might argue that growing insecurity is an inevitable consequence of economic flexibility and globalisation; allowing insecurity to grow unchecked risks undermining popular support for both. The key, therefore, is to find a model that maintains this flexibility, while providing greater security for workers. This paper aims to
provide a blueprint for just such a model, ending the false choice between flexibility and security.
This reported is kindly supported by Genworth Financial.