Coronavirus: UK wages down 649,000 jobs during deadlock


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The number of workers on payrolls for British companies fell by 649,000 between March and June, according to official figures.

The number of people applying for work-related benefits last month – including the unemployed – was 2.6 million.

The overall unemployment rate has remained unchanged, but there are 47,000 more young people unemployed than a year ago.

Unemployment has not exploded, as many feared, as a large number of companies have put employees under government permission.

But economists say the full effect on jobs will not be felt until the program ends in October.

How can we get a clearer idea of ​​what’s going on?

The overall unemployment rate has not changed since the lock was introduced to stop the spread of the coronavirus. It remained at 3.9% between March and May, unchanged from the previous three months.

  • Why is the unemployment rate not increasing?

But due to the effect of the leave scheme on the job market, analysts say the number of hours worked per week currently more accurately reflects the impact of the coronavirus crisis.

The Office for National Statistics (ONS) said that since the start of the pandemic, total weekly hours worked in the UK had dropped from a record 175.3 million, or 16.7%, to 877, 1 million hours.

“This is the largest annual decline since estimates began in 1971, as the total number of hours fell to its lowest level from May to July 1997,” added the ONS.

The number of Britons on payrolls – that is, those employed by a business and does not include the self-employed – fell 2.2% in June from March.

How are young people doing?

Young people are particularly affected.

“Despite the lack of an overall increase in the number of unemployed, the estimated number of unemployed people aged 16 to 24 increased by 47,000 over the year, while the other age groups remained stable,” said the ONS.

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Media captionFour experts offer advice to people looking for work

Many young people are employed in the hospitality industry, which has been largely closed since March 23. The retail sector, also a source of jobs for young people, was also hit hard by the foreclosure.

One-fifth of all those claiming unemployment benefits, 514,770, are between 18 and 24 years of age.

The number of young new applicants who signed between March and June is 276,000, more than double in three months.

BBC analysis revealed that there are now ridings with almost 20% of their young population receiving universal credit or jobseeker’s allowance – including Walton in Liverpool and south of Blackpool.

Even affluent areas such as southwest Surrey, Henley and Windsor have seen a quadrupling of the number of young claimants locked out, although many have likely become eligible for claim as a result of a put on leave.

According to the Resolution Foundation, one-third of workers between the ages of 18 and 24 lost their jobs or were on leave during the pandemic, compared to one in six adults over this age.

Another think tank, the Institute for Fiscal Studies (IFS), says that young people are more likely to be employed in jobs that cannot be worked from home – especially in the hard-hit hotel sector.

Are there currently any jobs?

There are not many jobs for anyone.

Vacancies in the United Kingdom from April to June 2020 are at the lowest level since the start of the survey from April to June 2001, at around 333,000.

“This is 23% less than the record low from April to June 2009,” said the ONS.

Chancellor Rishi Sunak recently announced a £ 2 billion “start-up program” to create more jobs for young people who are struggling to find work.

The ONS added that more people than usual who lost their jobs were not currently looking for another and were therefore economically inactive rather than unemployed, while some long-term unemployed had stopped looking. work.

The figures came as a survey by the British Chambers of Commerce (BCC) indicated that 29% of companies expected to decrease the size of their workforce over the next three months. The BCC called for a reduction in employers’ premiums for national insurance to protect businesses and jobs.

The government’s spending watchdog, the Bureau of Budget Responsibility, has warned that in the worst-case scenario, unemployment could reach four million.

“Your mood drops”

Theater technician Charlotte Baker, 29, is unemployed due to the coronavirus crisis.

She started a new job at Fairfield Halls in Croydon in September of last year and was put on leave in March.


Charlotte Baker Theater Technician Fired

Last month, she was laid off, although she could have stayed on leave.

“Your mood is going down, your sanity and it has been very difficult to live in limbo essentially,” she told the BBC.

“I obviously just started this new job which I absolutely loved and my partner and I wanted to buy in Croydon – we were looking to buy our first property together and it was put on hold.

“It’s difficult too – while some people return to normal, we find certain freedoms, there are people like me and many people I know who are very deep in things and do not know what is going to happen pass. happen.

“I’m thinking of doing a carpentry class. I could then potentially make a living from this, or I hope that if my job comes back, I bring these skills back to this job. But it’s difficult, very hard.

What the economists say?

Jeremy Thomson-Cook, chief economist at financial services company Equals, said, “The leave plan has made reading monthly job numbers rather meaningless, given that nine million people are technically not neither employed nor unemployed.

“The only guarantee is that some will seek new jobs as the program ends, and some will not be able to change their living conditions due to the pandemic.”

“Wage growth has fallen, which may be due to the reinstatement of lower-paid workers or employers who have failed to supplement seniority wages as before. As with all employment data right now, we have to look through the prism of the leave system to see what is what. ”

There is a storm ahead: official government figures – the Office of Budget Responsibility – have warned that unemployment could reach four million this year.

But most of this has yet to hit the numbers. Normal employment figures have been supported by support schemes: more than 11 million private sector workers are still on the government’s payroll. These plans were very effective in avoiding a more serious crisis when the lock struck.

The turbulence and the impending difficulties are clear, however, with an average real salary – that is to say after inflation – 1.3% lower than a year ago in May and the number of vacancies at a record level.

The number of people considered independent has dropped 178,000 records.

While employers are now considering the end of support schemes, announcements of layoffs are increasing. Despite the Chancellor’s new plan, a sharp increase in unemployment still seems inevitable.

The challenge is to get people back to work – especially the youngest, the group most likely to have been put on leave. Long-term unemployment, especially at the start of a career, can ruin livelihoods and prospects for decades.

And as the economy opens up, the uncertain outlook can make employers reluctant to do the same with hiring.

What is the political reaction?

Business secretary Alok Sharma said he had “enormous sympathy” for those who found themselves unemployed.

“I know it’s going to be very, very difficult for a lot of people because of it. The best thing we can do is to continue to open the economy in a gradual and prudent way and to revive businesses, “he told the BBC Today program.

He said the cost of inaction would have been “much higher” than the measures taken by the government.

Bridget Phillipson, fictitious senior secretary to the Treasury, said that each job lost was “a personal tragedy now and a hammer blow for long-term public finances”.

She accused the Chancellor of adopting a “global approach” rather than targeting the sectors most affected by the crisis.

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