'Year of jobs destruction'
Number of people on UK company payrolls has plummeted by 800k since pandemic began
The coronavirus pandemic has taken an unprecedented toll on the jobs market, with about 800,000 people having lost their jobs since March last year, new figures reveal.
The Office for National Statistics (ONS) data published today (April 20) showed that the number of people on UK company payrolls plummeted by 813,000 since March 2020, with the number dropping by 56,000 last month alone.
Still, there were some positive signs in the latest statistics – the unemployment rate fell from 5.1 per cent in December to 5 per cent in January.
There were signs of a continued jobs rebound in February, with the umemployment rate falling even further to 4.9 per cent, meaning about 1.7m people are now officially classified as unemployed. The ONS counts only those who are out of work and are actively seeking a new job as unemployed.
A different look at unemployment – the benefits claimant count, which includes all of those who are on work-related benefits, paints a worse picture than official unemployment figures, with 2.7m people now claiming work-related benefits.
Despite signs showing an improved picture of the jobs market, with early figures for March and the first few weeks of April showing a rise in the number of job adverts as the economy opens up as lockdown restrictions ease, the ONS highlighted that there are still 700,000 net fewer jobs since the pandemic first hit.
Of this decrease in jobs, under-25s were the hardest hit – about two-thirds of the job losses were in this age group. Over half of the decrease in jobs has come from the hospitality sector, and a third of the jobs decline has occurred in London.
Commenting on the latest unemployment figures, especially the impact on young people, TUC general secretary Frances O’Grady said. “Now that Covid-19 restrictions are easing we need urgent action to support the recovery.
“Young workers are bearing the brunt of this pandemic,” she added. “Many of them working in badly-hit industries like retail, hospitality and the arts have lost their jobs and are at risk of long-term unemployment.
“Ministers must reboot the kickstart scheme and create good new jobs in green transport, infrastructure and social care. And boost universal credit so that people who have lost their jobs are not plunged into poverty.”
Despite positive signs in March and April as job adverts have increased, many have said that an even more worrying unemployment crisis is looming since the current figures are being artificially inflated by the continuation of the furlough scheme.
The furlough scheme, where the government pays 75 per cent of the wages of workers who are not in work but are being kept on by their employer, currently has about 5m workers signed up to the scheme, which is set to end in September.
Senior economist at the Resolution Foundation think tank Nye Cominetti warned that the millions who remain on the furlough scheme means that “the UK currently has a Covid employment gap of 6.2 million people who need to get back to work”.
“This highlights the true scale of the labour market challenge ahead of us as economy reopens, that can be hidden by just looking at employment numbers,” he said.
“Unless this gap is closed before the furlough scheme ends in September, we are likely to see a worrying rise in unemployment later this year – which will extinguish many people’s hopes of a post-Covid living standards recovery.”
Unite has long warned that setting an arbitrary cut-off date for the furlough scheme before the economy has fully stabilised and the pandemic is under control will trigger an unemployment crisis worse than we have seen already.
“As economists, including the IFS, agree we need [a furlough] extension until this pandemic is under control,” said Unite general secretary Len McCluskey last month. “Political choices made by other leading European economies provide longer furlough programmes, securing competitive advantage by protecting skilled workers and safeguarding strategically vital infrastructure.”
Unite is calling for the furlough scheme to be extended until at least 2022 and urges the government to get on board with a mass jobs creation programme that will tackle both the climate emergency and the unemployment crisis.
“Decent, skilled jobs are the quickest way to a more equal, recovered country, but while 2020 was a year of jobs destruction, we’ve seen little appetite for making 2021 a year for jobs creation,” McCluskey said.
Earlier this year, Unite published its Plan for Jobs in UK Manufacturing, produced in consultation with Acuity Analysis, which sets out seven projects that are best placed to create jobs now and assist the UK in meeting its climate change obligations.
These ‘magnificent seven’ projects, which will create hundreds of thousands of jobs, include investment in offshore wind, gigafactories, broadband, carbon capture use and storage, and a mass housing retrofit scheme, alongside an automotive renewal scheme and an aircraft replacement scheme.
Unite’s jobs plan is especially relevant this week as prime minister Boris Johnson is set to announce plans to bring forward the UK’s target to cut carbon emissions by 15 years, with carbon emissions to be slashed by 78 per cent by 2035.
“Our ‘shovel-ready’ projects plan shows where the fastest and best returns for our people and planet are to be found,” McCluskey said.
By Hajera Blagg