Employment

Nearly 650,000 people have lost their jobs since the start of lockdown

Overall unemployment rates are steady for now thanks to the furlough scheme – but the pandemic's effects on young people are stark, with 47,000 more out of work this year

A young person, seen from above, sits on the floor looking through a stack of bills in front of a laptop

New figures are laying bare the extent of the UK’s labour market crisis, with 649,000 jobs lost between March and June this year.

Despite the massive decrease in people on UK payrolls, the overall jobless rate has not changed – because so many companies have moved their employees onto the Government’s job retention scheme.

The furlough initiative, currently keeping 9.4 million people on the payroll, means number of hours worked are a more accurate reflection of how the pandemic has affected employment. According to Office for National Statistics data, the total time worked has fallen by 175.3 million hours a week to 877.1 million – a nearly 17 per cent drop.

“This was the largest annual decrease since estimates began in 1971, with total hours dropping to its lowest level since May to July 1997,” ONS researchers said.

With the unemployment rate staying at 3.9 per cent this year up until May, economists are warning that the impact of Covid-19 is still to truly be felt with concerns for wide-scale redundancies once the furlough scheme ends in October.

Covid-19 is deepening the wealth gap between parts of the country, too. Communities with a higher rate of social housing saw more people forced to claim Universal Credit: in England’s North East, which has the highest number of social rent homes (21.5 per cent), as many as 9.9 per cent of people had to claim benefits.

But in the South West, where only 12.7 per cent of people are in social housing, 5.9 per cent of people signed on for Universal Credit.

And as the pandemic drives down work opportunities, young people are feeling the effects particularly hard. The number of 16 to 24-year-olds out of work soared by 47,000 this year despite other age groups being unchanged.

It’s likely this is in part due to the high rate of young people in hospitality jobs, with bars and restaurants continuing to suffer as a result of lockdown and social distancing measures.

A third of 18 to 24-year-olds lost their jobs or were furloughed since lockdown began in March, compared to one in six older adults.

This meant that more than 276,000 young people claimed benefits between March and June this year, double the number who signed on before lockdown.

The UK risks widening the wealth and poverty gap that already exists across the country

There are now around 2.6 million relying on Universal Credit payments, and times are tough for those searching for a new job – there were around 333,000 vacancies across the UK between April and June this year, the lowest since that record was first taken in 2001.

That’s also 23 per cent lower than the previous record low in 2009, recorded following the 2008 financial crash.

Lynsey Sweeney, managing director of housing association body Communities that Work, said: “The evidence shows that the regions hit hardest by unemployment have a higher proportion of social rented households than many other areas of the UK.

“The Government’s commitment to a new Plan for Jobs to secure youth employment, whilst doubling the number of job centre work coaches, and investing in jobs of the future are welcome news. However, these efforts don’t go far enough to protect the UK’s most disadvantaged communities.

“Without targeted support to tackle unemployment for the most vulnerable communities, the UK risks widening the wealth and poverty gap that already exists across the country, putting the Government’s flagship “levelling up” agenda at risk.

“Social housing tenants are among the most economically vulnerable communities in the country, and the pandemic has compounded the challenges residents face in finding secure employment.”

It’s an issue The Big Issue will tackle through new initiative the Ride Out Recession Alliance.

We plan to develop and implement practical steps and solutions to prevent families losing their homes, and help people remain in employment. We’re calling for the Government to take care of disadvantaged people through job creation schemes, and avoid a homelessness disaster in doing so.

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