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Record jump in job losses

Published: Monday 16th November 2020

The Office for National Statistics (ONS) has revealed a record jump in job losses for the last quarter. The government’s furlough scheme and a recovering economy are failing to stop these losses. This record jump in job losses comes as the country is in a second lockdown. The ONS also revealed young people are being hit hardest by job losses. The record jump in job losses sees unemployment among young people rise three times higher than the national average.

Line of people waiting for an interview to show record jump in job losses

The biggest reason for this is so many young people work in the hard-hit hospitality, retail and leisure industries. As such, there are less jobs for young people. Unemployment among the under-25s currently stands at around 14.5%. The ONS says the 181,000, record jump in job losses pushes the UK’s unemployment rate from 4.1% to 4.8%. An estimated 782,000 people have lost their jobs in the UK since the pandemic began in March.

The challenge ahead

The latest figures show the size of the recovery needed. The Bank of England’s chief economist  warns of an increasing generation and regional economic gap. He said, “Levelling up was a priority. It is now a necessity. It is likely we will not see a levelling up, but the opposite by dint of the Covid crisis.” UK unemployment was below 4% before the first shutdown – the lowest level since the 1970s. The gradual opening of the economy saw job vacancy numbers rise. However, despite this rise, the number of jobs available was still down nearly 280,000 from last year. Of this, jobs for young people remains one of the biggest problems.

Red ladder reaching to the sky to show recent record jump in job losses

Chancellor Rishi Sunak responded to the latest figures, saying the extended furlough scheme would “protect millions of jobs”. He added, “Today’s figures underline the scale of the challenge we’re facing. I know that this is a tough time for those who have sadly already lost their jobs. I want to reassure anyone that is worried about the coming winter months. We will continue to support those affected and protect the lives and livelihoods of people across this country.”

Self-employed figures fall

As study by the London School of Economics (LSE) reveals a significant fall in people working for themselves. The institute estimated around 1 million people will stop being self-employed. Large falls in earnings brought on by the pandemic is the biggest reason for this. Self-employed numbers have risen consistently for over 20 years. However, this is under threat because of the forced shutdowns. This has led to a rise in grants for self employed. Results of the study reveal that during August nearly 60% of the five million self-employed in the UK were working less. This was despite August seeing the economy rebound slightly from the first lockdown and grants for self employed falling.

Man delivers parcel to a house as figures reveal a record jump in job losses

The LSE claims one-fifth of those questioned expect to stop being self-employed. This rose to 58% for business owners under the age of 25. This further adds to the problem of finding jobs for young people. The LSE says self-employed numbers fell because of the lockdown and a realisation of the risks of self-employment. The survey featured 1,500 people classed as self-employed. The survey also revealed that 32% of those questioned had worked less than 10 hours per week in August. However, 28% of self-employed workers using digital apps in the gig economy reported a rise in work. Unfortunately, it was also revealed that 78% of these ‘gig’ workers felt their health was at risk whilst working.

1 million+ people left behind

The government has introduced measures to help protect the self-employed during the record jump in job losses. This includes the Self-employment Income Support Scheme which provides 80% usual earnings grants for self employed. However, the scheme has been criticised for not covering many freelancers and contractors. This has led to the Treasury Select Committee claiming more than 1m workers are not receiving this aid.

Maria Venture, co-author of the LSE report, spoke about the findings. She said, “The government support for self-employed to date has not reached all self-employed workers. The newly self-employed appear to be particularly vulnerable. The extension of support to April 2021 and the recently announced changes further widen the gap between those eligible and ineligible.”

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