Employment

UK employment sees biggest crash in a decade

The picture is bleak for the UK's job market, but figures show the Government's furlough scheme – set to end in the coming months – has protected thousands from unemployment. Our Ride Out Recession Alliance wants to go further

EPA/Andy Rain

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.

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.

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”.

The Big Issue has launched the Ride Out Recession Alliance to fight back against the ‘inevitability’. We are fighting to hold thousands back from the financial cliff-edge that could result in a homelessness disaster. Read more to find out how we’re bringing together most innovative, urgent ideas from experts across housing and job creation to create a way forward.

Image: EPA/Andy Rain

Support your local Big Issue vendor

If you can’t get to your local vendor every week, subscribing directly to them online is the best way to support your vendor. Your chosen vendor will receive 50% of the profit from each copy and the rest is invested back into our work to create opportunities for people affected by poverty.
Vendor martin Hawes

Recommended for you

View all
Workers blame Amazon's 'union-busting' after losing historic union vote: 'This is not the end'
Workers' rights

Workers blame Amazon's 'union-busting' after losing historic union vote: 'This is not the end'

'Huge mandate': Brits of all political stripes want stronger rights for workers, poll finds
workers' rights

'Huge mandate': Brits of all political stripes want stronger rights for workers, poll finds

From a new UK pilot to union backing: The four-day working week has never been closer to reality
Four-day working week

From a new UK pilot to union backing: The four-day working week has never been closer to reality

'It's David vs Goliath': Inside Amazon workers' historic battle for trade union recognition
Trade unions

'It's David vs Goliath': Inside Amazon workers' historic battle for trade union recognition

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know

Support our vendors with a subscription

For each subscription to the magazine, we’ll provide a vendor with a reusable water bottle, making it easier for them to access cold water on hot days.