One in five furloughed young workers have lost their jobs

30th October 2020

New research by the Resolution Foundation has revealed that one in five furloughed young workers have lost their jobs.

The Foundation revealed that of the workforce overall, 17% of those in work before the pandemic were still not back in full employment, including those no longer working, those still furloughed or whose pay or hours have been cut. For black, Asian and minority ethnic workers 22% had lost their jobs, compared to 9% for the general population.

Around one-in-five young people, and over one-in-five black, Asian and minority ethnic (BAME) workers, who were furloughed during lockdown have since their lost jobs – and just one-in-three young people who have lost their jobs have been able to find new work – according to a major new Resolution Foundation report published today (Wednesday).

.The report notes that while widespread furloughing has curbed the rise in unemployment in the early phase of the pandemic, the winding down of the Job Retention Scheme (JRS) is revealing the true nature of Britain’s jobs crisis.

It finds that of all surveyed workers who have been furloughed during the crisis, around half have returned to work in full, one-in-three are still fully or partially furloughed, and almost one-in-ten (9 per cent) have lost their jobs altogether.

The post-furloughing fall into unemployment has been most common among 18-24-year olds (19 per cent), BAME workers (22 per cent) and those previously working on insecure contracts (22 per cent).

The Foundation adds that the scale of unemployment identified in its survey implies unemployment was at 7 per cent in September well above the latest official figures of 4.5 per cent in the three months to August – rising to 20 per cent among 18-24 year olds. This would mean the UK is already facing the highest levels of youth unemployment in four decades.

The employment effects of the crisis so far have borne down particularly hard on London. Over one-in-five workers (21 per cent) in the most deprived parts of the country were either not working, furloughed, or had lost hours (and pay) in early September because of coronavirus (compared to 17 per cent across the UK as a whole). And of this group, more than one-in-four (28 per cent) live in London.

The research says that th recent rise in unemployment, which is expected to keep climbing over the coming months, is not just due to people losing their jobs. In fact, it finds that the majority of the increase is the result of fewer unemployed people being able to find new work than normal.

The report notes that fewer than half (43 per cent) of those who have lost their jobs since March had found new work by September, falling to just one-in-three (33 per cent) among young people, and 36 per cent of people in hard-hit sectors like hospitality, leisure and non-food retail.

The Foundation says that there is little sign that workers exiting these struggling sectors are flowing into areas of the labour market that are able to grow during this pandemic. Among those looking for work who currently or previously worked in hospitality, leisure or non-food retail, the top four job-search destinations are hospitality, leisure, and non-food retail, as well as administrative positions.

The report notes that people are more likely to look for vacancies in the leisure sector (21 per cent) – which had the fewest listed vacancies of all major industry groups in recent months – than the sectors with the most listed vacancies – social care (where 17 per cent looked for vacancies). This suggests the UK is unlikely to see a swift reallocation of labour, and that high unemployment will be with us for some time to come, says the Foundation.

Finally, the report says that while the initial effects of the crisis bore heavily on the youngest and lowest paid, there are some signs that labour market disruption will likely become more widespread over time.

More than a quarter (28 per cent) of respondents in work in September are worried about redundancies occurring, have been told a redundancy process either may or will happen, or have been told they will be made redundant – and these worries are common across age groups.

Kathleen Henehan, Senior Research and Policy Analyst at the Resolution Foundation, said “The first eight months of the Covid crisis have been marked by an almighty economic shock and unprecedented support that has cushioned the impact in terms of people’s livelihoods.”

“But the true nature of Britain’s jobs crisis is starting to reveal itself. Around one-in-five young people, and over one-in-five BAME workers, have fallen straight from furloughing into unemployment.”

“Worryingly, fewer than half of those who have lost their jobs during the pandemic have been able to find work since. This suggests that even if the public health crisis recedes in a few months’ time, Britain’s jobs crisis will be with us for far longer.”