Covid-19 effect on the UK job market

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Millions of people across the UK have had their working lives upended because of the coronavirus pandemic.

While many are working from home, others have been furloughed for weeks or even made redundant.

So who has been affected most to date by job losses? And which sectors have been worst hit?

Jump in benefit claims

The UK unemployment rate was estimated at 3.9% between January and the end of March. That’s slightly down on the previous period, according to the Office for National Statistics (ONS).

The full extent of the impact of lockdown measures on the UK jobs market won’t be known for some time, given that these new figures only cover a few days after the restrictions were introduced on 23 March.

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The claimant count in April went up by 856,500 to 2.1 million. This figure doesn’t include everyone who is out of work, since not all can claim assistance. Which is a 1.9% increase in Unemployment across the UK.

Young people hardest hit

Young workers seem to have been most impacted by lockdown measures so far. New research by the Resolution Foundation think-tank suggests that 9% of those aged between 18 and 24 have lost their jobs altogether, the highest of any age group.

Meanwhile, a previous study by the Institute for Fiscal Studies (IFS) found that sectors that are now shut down employed nearly one-third of all workers under the age of 25, or 25% of young men and 36% of young women. That compares to just one in eight workers aged 25 and over.

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The IFS said that young people, women and the lowest earners will be most affected economically by the pandemic.

Fewer hours worked

UK workers are clocking fewer hours as parts of the economy came to a standstill after lockdown measures were introduced on 23 March. The total number of weekly hours worked recently saw its largest annual fall in 10 years.

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Estimates based on returns for single weeks suggest that this was mostly down to the fall in hours in the last week of March, with a much smaller decrease in the previous week, the ONS said. In the final week of March, the total number of hours worked was about 25% fewer than in other weeks in the same quarter.

Sector shutdown

Many staff have been furloughed in sectors that have been forced to shut down during the coronavirus pandemic. Those include retail, leisure and hospitality, where a high proportion of women work.

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The largest proportion of the workforce being furloughed was recorded in accommodation and food service activities, which includes hotels and restaurants. That was followed by those working in the administrative services and manufacturing, according to one ONS survey.

The North East of England had the highest unemployment rate estimate for the three months to the end of March at 5.4%.

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The largest rise in the unemployment rate on the previous quarter was seen in the West Midlands and Scotland, both at 0.6 percentage points. One report by the Centre for Cities found that the economic pain inflicted by Covid-19 will be felt unequally across the UK, with workers in more affluent areas such as the South East able to work from home, for example. The coronavirus crisis risks widening regional inequalities, and frustrating government efforts to “level up” prosperity across the UK, it suggests.

Job vacancies dip

The estimated number of vacancies in the UK fell sharply during the 2008 financial crisis. Since 2012, they’ve generally been on the up, reaching a record high of 855,000 between November 2018 and January 2019.

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But between February and April, there were an estimated 637,000 vacancies in the UK, 170,000 fewer than in the previous quarter. New research by the IFS suggests that workers across the board could have fewer options due to the coronavirus pandemic.

Having analysed jobs posted on the Department for Work and Pensions’ (DWP) website in real-time, it found that they had started to drop off around mid-March. By the time the lockdown was announced, firms had stopped posting new vacancies almost entirely. New postings on 25 March were just 8% of their 2019 levels.

Sources: ONS, IFS, IFC, BBC