The number of people being made redundant in the UK is rising at the fastest pace on record as the second wave of Covid-19 and tougher lockdown measures put increasing pressure on businesses and workers.
Unemployment has hit the highest level for four years, while millions more workers have been placed on furlough. Although the jobs crisis has not been as bad as feared earlier in the pandemic, the government’s independent economics forecaster – the Office for Budget Responsibility – expects the jobless rate to more than double from pre-pandemic levels to 7.5% this summer after furlough ends, representing more than 2.6 million people out of work.
Here are the key charts for the UK jobs outlook in 2021.
The latest official figures for unemployment from the Office for National Statistics cover the three months to November 2020. Reflecting the jobs market during the second English lockdown and as tough restrictions were imposed in Scotland, Wales and Northern Ireland, the data shows unemployment reached 5% – representing more than 1.7 million people. Unemployment was 4% in February before the pandemic struck. There are some promising signs, including a slowdown in redundancy rates. Economists believe unemployment would be far higher without furlough, while joblessness on a par with the 1980s of about 12% – forecast early in the pandemic – has so far been avoided.
Younger workers are bearing the brunt of the jobs crisis inflicted by the Covid-19 pandemic. This is largely because they tend to work in sectors of the economy that have suffered most from physical-distancing restrictions and shutdowns – such as retail, hospitality and leisure. Low-paid staff, and workers from black, Asian and minority ethnic (BAME) backgrounds have also suffered a disproportionate impact, stoking fears that a lasting legacy of the crisis will be to entrench inequalities.
Preventing a shaper rise in unemployment during the pandemic, the government’s furlough scheme has topped up the wages of almost 10 million workers at more than 1.2m companies since the crisis began. The number of people on furlough hit a peak of almost 9 million in May during the first lockdown, and gradually fell as the economy reopened last summer. However, at its intended closure date in October, more than 2 million workers were still receiving support. Their numbers swelled further during renewed lockdowns after the scheme was extended, reaching almost 4 million by the end of 2020. The scheme, now due to run until the end of April, has cost the Treasury almost £50bn so far. Billions more has been spent subsidising lost income for self-employed workers, but millions of people have fallen through the cracks and received no emergency Covid support.
The impact of the pandemic has been felt most by companies and workers in the hospitality, leisure, arts and entertainment sectors, as well as in travel and retail, where physical distancing and the shift to online sales during the crisis has cost thousands of workers their jobs.
The fallout from rising job losses and a sharp drop in income from work for UK households has been a surge in the numbers of people claiming unemployment-related benefits. The government increased the value of universal credit benefits by £20 a week at the start of the crisis, but this is temporary and due to be cut again from the end of March. Charities have warned this would trigger a sharp rise in poverty levels across Britain.
Britain’s economy has been plunged into the deepest recession for more than 300 years by the crisis. With repeat lockdowns, a lack of clarity about the future and continued Covid restrictions, fewer companies are advertising to hire new staff. There have been reports of hundreds of people applying for single job openings, including almost 1,000 for a receptionist job in a Manchester diner. Job vacancies have started to recover, but remain scarcer than before the pandemic.
— to www.theguardian.com