New jobless figures published on Tuesday (August 11) show the scale of the employment crisis facing the UK amid the coronavirus pandemic, with nearly three quarters of a million jobs falling off company payrolls between March and July.
Between April and June alone, 220,000 jobs were lost – the biggest quarterly fall since 2009, when the UK was plunged into a global financial crisis.
The Office for National Statistics (ONS) found that both young and old people, as well as those in jobs deemed less skilled, were most likely to have lost their jobs in the coronavirus crisis.
“The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs,” said ONS deputy national statistician Jonathan Athow.
“This is concerning, as it’s harder for these groups to find a new job or get into a job as easily as other workers.”
Some sectors have been harder hit than others, with the hospitality industry shedding jobs at a rate of knots. In the restaurant business alone, more than 20,000 jobs have been lost this year.
Record zero hours contract rise
For millions of people still in employment, the picture is still bleak – pay levels including bonuses are down 1.2 per cent on average, which is the first time there was a negative reading since records began nearly two decades ago.
Millions of workers are also being forced to accept worse terms and conditions. Zero hour contracts have exploded by 17 per cent in the most recent quarter compared to the same period last year. There are now 1.05m people on these contracts, the first time in history this figure has risen above 1m.
Meanwhile, the number of people claiming Universal Credit has surged to a total of 5.6m, figures for July show, which is nearly double the claimant number in February of 2.9m.
In yet more evidence that young people are being particularly battered by the economic fallout of the pandemic, the number of people under 25 claiming Universal Credit has soared. There are now nearly 900,000 young people who have signed on to Universal Credit, up from 454,000 in January. This means that now nearly 1 in 7 young people aged 18 to 24 are claiming Universal Credit.
While the economic situation for many people both in and out of work is bad now, experts predict an even more devastating wave of job losses just around the corner.
The government’s furlough scheme, where the state pays 80 per cent of people’s wages if their employers agrees to keep them on, has begun to wind down and is scheduled to end in October.
Extend furlough scheme call
With no modification or extension of the furlough scheme yet in sight, already there are concrete signs that this will trigger a new raft of job losses.
A BBC freedom of information request found that in June, 1,778 firms in England, Wales and Scotland said they intended to cut a total of more than 139,000 jobs. This represents a massive five-fold increase from June last year, when only 345 firms said they planned to cut just 24,000 jobs.
Unite assistant general secretary Steve Turner highlighted why this finding was significant.
“With 99.9% of UK businesses employing under 49 people (60% of all workers) the figures here are the tip of the iceberg,” he tweeted.
“With demand and confidence low millions of jobs are at risk. Sector support is needed now,” he added, calling on chancellor Rishi Sunak to extend the government’s furlough scheme.
Meanwhile a new survey out this week from the Chartered Institute for Personnel and Development (CIPD) found that an astonishing one in three employers say they intend to cut jobs by the end of September – yet more evidence that the furlough scheme’s end will usher in more job losses.
The CIPD survey also found that more than 40 per cent of employers have applied recruitment freezes, mainly in hospitality, IT and the services sector. The poll moreover found that nearly one in five employers have instituted pay cuts in response to the crisis, while a quarter cut bonuses and one in three employers either froze pay or delayed pay rises.
Unite general secretary Len McCluskey reiterated the union’s call for an extended and modified furlough scheme.
“We warned that the tapering of the jobs retention scheme would see redundancy notices fly around like confetti and sadly this is coming to pass,” he said.
“But this crisis is being made infinitely worse by the very different approach the Westminster government is taking to that of our competitor countries where targeted support is helping vital sectors weather this storm, saving jobs in the process,” McCluskey added.
“There are simple effective measures, such as short-time working, that will keep people in jobs and retain skills. But this government lacks the capacity to understand, or the political will to grasp, that this is the moment it must use its vast power of intervention for the collective good of the country.
“This criminal lack of engagement at the heart of the government means workers and their employers are being abandoned by ministers who appear to have no plan for rebuilding and recovering our economy,” McCluskey went on to say.
“This will not be forgotten or forgiven by industries and communities that have long-served our country, and are desperate for the chance to continue to do so, only to be ignored by the government in their hour of need.”
By Hajera Blagg