As many as 730,000 jobs have been lost since March, new figures show, as the Covid-19 crisis continues to hit the UK labour market with force.
Office for National Statistics (OFS) analysis showed that younger (18-24) and older (65+) workers, plus those in manual occupations, were worst affected by job cuts and diminishing vacancies.
Also driven by losses for self-employed and part-time workers, it was the biggest drop in employment since the financial crisis in 2009. The figures do not include furloughed or zero-hours contract workers.
The data showed that decreasing employment in May, June and July was mostly down to fewer people moving into employment, with many out of work but not looking for a job – meaning the figures do not actually show a rise in unemployment, but a drop in the number of people on payrolls across the country.
The number of people on the payroll fell by just over 100,000 in July and is down 700,000 since March. (2/n) pic.twitter.com/PzCC9KOddI
— Jonathan Athow (@jathers_ONS) August 11, 2020
This is of concern because sustained time away from the world of work could make it harder for people to eventually get back into jobs, the OFS said.
But researchers found an estimated 10 per cent increase in vacancies across the UK between April and July, to roughly 370,000 – driven mostly by smaller businesses taking on more staff to operate in accordance with Covid-19 safety measures.
The number of hours being worked also hit a record low this year, and then again this quarter, meaning even those still in work are at risk of falling into poverty.
Zero-hours contracts were found to be on the rise, hitting the highest number on record by soaring 156,000 to 1.05 million. This is thought to be contributing to a loss in hours for young workers who are more likely to be on contracts which don’t guarantee them a set number of hours’ work. Meanwhile, the number of over-65s who lost work is at a record high after a decrease of 161,000 between April and June.
Jonathan Athow, deputy national statistician for economic statistics at the OFS, said the labour market had been “profoundly affected” by the pandemic.
Make no mistake: the UK is now mired in a jobs crisis the like of which we haven’t seen in decades.
It’s not too late for the Chancellor to change course, but he must act now and stop his damaging one-size-fits-all withdrawal of wage support. https://t.co/LpPmnxwDJs
— Anneliese Dodds (@AnnelieseDodds) August 11, 2020
He added: “As the furlough scheme unwinds and employers adjust their plans in the light of withdrawal of the furlough scheme and further economic developments, we might see some bigger changes in the labour market over the coming months.”
The number of benefit claimants has also soared as a result of widespread redundancies in the latest quarter, reaching a record 2.7 million last month.
Pay rates dropped for the first time since records began in 2001, down 0.2 per cent on average and bonuses down 1.2 per cent.
Capital Economics senior economist Ruth Gregory said the cracks showing in the labour market were “likely to soon turn into a chasm”, warning that further unemployment increases in the coming months are “all but inevitable” – describing the current state of the market as “just the lull before the storm”.
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