Wales potentially faces levels of unemployment not seen since the recession of the early 1990s, new modeling shows.
Research commissioned by the BBC suggests that the number of long-term unemployed could reach around 44,000 people.
This would be four times higher than the current number.
The Welsh government has said investment is needed to soften the shock, but tough times lie ahead.
While the unemployment rate is broadly similar in Wales and England, unemployment in Wales has risen to double the rate across the border since the start of 2020.
There has been a 41% increase in Wales compared to just 18% in England – meaning around 20,000 more people are looking for work in Wales.
And despite the recent good news about vaccines and the possible end of lockdowns in the New Year, experts say there could be worse to come.
Unemployment worse than the 2008 crisis
David Hagendyk, director of the Learning and Work Institute in Wales, modeled what the unemployment figures in the country might look like.
For the long-term unemployed, the situation is grim. Currently there are 11,000 people in this category in Wales, but Mr Hagendyk said the figure could rise sharply.
“Our modeling shows that this could increase and be 29,000 to 67,000 long-term unemployed.
“That gives us an average of about 44,000 people.
“It blows the 2008 financial crisis out of the water in terms of long-term unemployment.
“It takes us back to the early 1990s and the kind of recession we went through back then. ”
Mr Hagendyk said that while the numbers are eye-catching, it was important to remember the human stories behind them.
“These are real people with real jobs, real families and we know there is a long-term scarring impact.
“It is absolutely essential that the government act quickly in order to stop this kind of modeling potential that we might see. ”
James Aubrey said he wanted to be a pilot for as long as he can remember, tailoring his exams and work experience to that goal.
He had to finance a two-year training course – borrowing £ 100,000 which he has to repay over the next decade.
It shouldn’t have been a problem for the 22-year-old from Cardiff, but the aviation industry has been one of the hardest hit by the pandemic.
“The starting salaries offered by most airlines were around £ 40,000 which meant there was enough to pay off the loan and be able to live on too,” James said.
But pilots are laid off rather than recruited, which is why James decided to look for a job in retail – where he worked before his training – to ensure he had a short-term income.
“The loan is tied to my parents’ house,” he said.
“So that means there’s a little more pressure on the top just to deal with these repayments, just to make sure it doesn’t affect my family as well as I do. ”
While still determined to work as a pilot, James worries it will take him much longer than expected to get back into aviation.
The ‘vulnerable’ Welsh economy
The Welsh government has said it has allocated more than £ 1 billion to support businesses and protect jobs during the pandemic.
Despite this, unemployment is rising faster in Wales than in England.
Mr Hagendyk said the underlying reasons for this lie in the way some sectors employ more people in Wales.
“Our research has shown that around one in five workers here in Wales work in closed sectors – the sectors of the economy which were most affected by the first foreclosure,” he said.
“They are hospitality and tourism, aviation and retail companies – that’s around a quarter of a million workers here in Wales. ”
Because so many people are working in these vulnerable sectors, it does not bode well for the future, Hagendyk said.
“They are more likely to let people go, to make layoffs,” he said.
“They are also very likely not to hire new people. ”
The manager can’t sleep
Across Wales, the hospitality industry has been among the hardest hit – revenue has plummeted for hotels, pubs and restaurants.
On the Llyn Peninsula in Gwynedd, the Bryncynan pub started the year spending £ 1million on renovations.
Pub manager Heidi Bakewell was expected to earn a similar amount of revenue over the course of the year, but in reality the pub took about a quarter.
Heidi had also hired and trained new staff, some at risk of losing their jobs because restrictions and lockdowns meant the pub could not operate normally.
“I haven’t slept the past two nights just thinking, what are we going to do?”
“Do we share the hours so they all have a few hours?” It doesn’t really work because it’s not enough for them to live.
“We still have three chefs. I think we still have 11 outside staff.
“Those numbers will probably go, I would say, to two chefs at most and we’ll probably reduce our front desk staff, maybe to five. ”
Decision of “horrible” layoffs
When the Pontypridd Kookoo Madame fashion store reopened in September, people lined the streets for the few jobs on offer.
Among the hopefuls who hoped to land a workshop job were senior managers, graduates and those who were qualified but could not enter industries of their choice.
For owners Emma and Rez Jamal, 2020 has posed many obstacles.
First they were inundated by Storm Dennis, and as they recovered, the first lockdown happened.
To save their business, they moved to new premises and had to choose between paying for the move or supplementing staff salaries at the end of the leave.
“We had to do layoffs which was a really tough decision to make,” Emma said.
“It was our staff who had been with us for some time.
“It was awful, absolutely awful. I wouldn’t want to start over.
Although they may have opened in September, the firewall required them to close again.
“Everyone’s scared, everyone’s worried, nobody knows what’s around the corner,” Emma said.
“Investment is the key”
Welsh Economy Minister Ken Skates said the way to tackle the difficult times ahead was to invest in “jobs, jobs and more jobs”.
He said: “We have a proven track record of investing in people and supporting people during tough economic times.
“We are confident that we have plans, policies and programs in place to prevent the devastating long-term scars that mass and long-term unemployment can inflict on our country.
But Mr Skates admitted that none of the forecasts he had seen had been “rosy”.
“There is no forecast that suggests that we will get out of this situation incredibly quickly and rebound instantly,” he said.
Huge recycling cost
Many people across Wales face the prospect of having to learn a new profession as jobs shrink.
Mr Hagendyk said training even half of the number of people likely to find themselves long-term unemployed would be extremely expensive, costing up to £ 218million.
“This is an investment beyond what we’ve seen in schools and colleges before, so it’s new money,” he said.
“We have seen the Welsh government expanding places in training schools and apprenticeships in an attempt to offset part of this challenge.
“But I think at the moment the scale of the response is not sufficient to meet the scale of the challenge. ”
The Welsh government has said it would need additional funding from Westminster to help with recycling.
Additional funding to support skills has been announced by the UK government for England, and Wales will benefit through the Barnett Formula. However, there is concern that this funding alone will not be sufficient to meet what may be needed.