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More than 600,000 UK workers lose their jobs amid lockdown Coronavirus: Job cuts warning as 600,000 roles go in lockdown
(about 1 hour later)
The number of workers on UK payrolls dived more than 600,000 between March and May, official figures suggest.The number of workers on UK payrolls dived more than 600,000 between March and May, official figures suggest.
Meanwhile, the number of people claiming work-related benefits - which includes the unemployed - was up 126% to 2.8 million.Meanwhile, the number of people claiming work-related benefits - which includes the unemployed - was up 126% to 2.8 million.
The early estimates reflect the impact of around six weeks of lockdown in which large parts of the UK were shut.The early estimates reflect the impact of around six weeks of lockdown in which large parts of the UK were shut.
But economists say the full effect on employment will not be felt until wage support schemes end in October.But economists say the full effect on employment will not be felt until wage support schemes end in October.
"The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked," said Jonathan Athow, deputy national statistician for economic statistics at the Office for National Statistics (ONS). "The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked," said Jonathan Athow, deputy national statistician for economic statistics at the Office for National Statistics (ONS)."
"Early indicators for May show that the number of employees on payrolls were down over 600,000 compared with March." Frances O'Grady, secretary-general of the Trades Union Congress, said the labour market was "on red alert".
Separate figures published by HMRC on Tuesday showed that a total of 9.1 million workers have now been furloughed. "We need strong action now to stop lasting economic damage," she added.
Overall, the UK unemployment rate held steady at 3.9% in the three months to April as massive wage support schemes brought in by the government prevented job losses. Separate figures published by HMRC on Tuesday showed that a total of 9.1 million workers are having their wages paid through the government's furlough scheme - more than a quarter of the workforce.
Reflecting this, the ONS said the total number of weekly hours worked in period had dropped to 959.9 million - down by a record 94.2 million, or 9%, on the previous year. This explains why overall, the official UK unemployment rate for the three months to April held steady at 3.9%.
There was also a record fall in job vacancies between March and May to 476,000 - down 342,000 from the last quarter. However, the ONS said the total number of weekly hours worked in the period had dropped to 959.9 million - down by a record 94.2 million, or 9%, on the previous year.
'Weakened dramatically' And there was a record fall in job vacancies between March and May to 476,000 - down 342,000 from the previous quarter - hinting at worse to come.
The figures come after large parts of the economy were shut down to fight coronavirus. 'Pretty awful'
However, Capital Economics economist Ruth Gregory warned bigger unemployment rises were on their way. Capital Economics economist Ruth Gregory said it was "abundantly clear" that the labour market had weakened dramatically.
"It was abundantly clear in every other indicator [other than the headline unemployment rate] that the labour market has weakened dramatically," she said.
"Despite the apparent stability of the actual unemployment rate, the labour market data were still pretty awful. And some of this will surely start to filter through into the actual unemployment figures as the government's job furlough scheme is wound down from August.""Despite the apparent stability of the actual unemployment rate, the labour market data were still pretty awful. And some of this will surely start to filter through into the actual unemployment figures as the government's job furlough scheme is wound down from August."
Tej Parikh, chief economist at the Institute of Directors, agreed: "The furlough scheme continues to hold off the bulk of job losses, but unemployment is likely to surge in the months ahead."Tej Parikh, chief economist at the Institute of Directors, agreed: "The furlough scheme continues to hold off the bulk of job losses, but unemployment is likely to surge in the months ahead."
'I've applied for more than 100 jobs''I've applied for more than 100 jobs'
Kayleigh Rennix has never struggled to find work before. The HR manager from Essex was earning close to £40,000 working in the education sector before she resigned in March, fearing her role was at risk.Kayleigh Rennix has never struggled to find work before. The HR manager from Essex was earning close to £40,000 working in the education sector before she resigned in March, fearing her role was at risk.
Since then she's applied for dozens of jobs, but has had little interest from employers.Since then she's applied for dozens of jobs, but has had little interest from employers.
"As my leaving date approached, coronavirus reared its ugly head. I would say I've applied for more than 100 jobs and not had many call-backs," she says."As my leaving date approached, coronavirus reared its ugly head. I would say I've applied for more than 100 jobs and not had many call-backs," she says.
Now the 34-year-old has found herself relying on benefit payments for the first time in her life, and expects to move back in with her parents when her tenancy expires later in the summer.Now the 34-year-old has found herself relying on benefit payments for the first time in her life, and expects to move back in with her parents when her tenancy expires later in the summer.
Poorer areas 'hit hardest'Poorer areas 'hit hardest'
The Institute of Employment Studies (IES), an apolitical think tank, pointed to the rise in claimant numbers. These have climbed 1.6 million since March, a rate faster, it says, than during the Great Depression of 1929. Despite the gradual reopening of the economy, some economists believe unemployment could top 10% later in 2020 as social distancing rules remain in place and consumers curb their spending.
It said that currently eight unemployed people were chasing every job vacancy in the UK - up from two before the crisis. The Institute of Employment Studies (IES), an apolitical think tank, pointed out that the number of claims for work benefits had risen 1.6 million since March - a rate faster, it says, than during the Great Depression of 1929.
It said among the worst hit areas of the UK were: It said that currently eight unemployed people are chasing every job vacancy in the UK - up from just two before the crisis.
Tony Wilson, director of the IES, said: "If the public health crisis is just starting to ease, today's figures show that the unemployment crisis is only just beginning. "If the public health crisis is just starting to ease, today's figures show that the unemployment crisis is only just beginning," said Tony Wilson, director of the IES.
"It's clear too that this crisis is hitting many poorer areas hardest - with coastal towns and ex-industrial areas seeing particularly big increases in unemployment.""It's clear too that this crisis is hitting many poorer areas hardest - with coastal towns and ex-industrial areas seeing particularly big increases in unemployment."
The IES said among the worst hit areas of the UK were:
In normal times, the employment rate tells you most of what you need to know about jobs.In normal times, the employment rate tells you most of what you need to know about jobs.
But these are not normal times.But these are not normal times.
With the furloughing scheme keeping people employed, if not working, we have to look elsewhere to get a picture of what's happening.With the furloughing scheme keeping people employed, if not working, we have to look elsewhere to get a picture of what's happening.
It's like building a jigsaw, but with pieces from different boxes: surveys, payroll data, jobs advertised, three-month trends and even looking at week-on-week changes.It's like building a jigsaw, but with pieces from different boxes: surveys, payroll data, jobs advertised, three-month trends and even looking at week-on-week changes.
The picture it builds is different to the headline employment figure but perhaps not surprising: Serious pressure on jobs during lockdown.The picture it builds is different to the headline employment figure but perhaps not surprising: Serious pressure on jobs during lockdown.
A swathe of businesses have announced job cuts as the economy has sharply contracted due to lockdown including: A swathe of businesses have announced job cuts as the economy has contracted sharply due to the pandemic, opting not to furlough those workers instead. Examples include:
The headline quarterly employment and unemployment numbers remain barely changed, as all the furloughed workers count as having jobs.
The furlough scheme is working in suppressing unemployment and protecting livelihoods so far, the real test of its functioning is what happens now.
The test of it will be whether those jobs remain as the taxpayer wage support is eased away. It requires the government to inject as much confidence as possible, into the minds of employers facing uncertainty and declining bank balances.
But further rescue package and employment support will be required too. The balancing act with the pandemic remains as delicate as ever. As one Cabinet minister puts it - "we need to restart the economy, without restarting the virus".
Last week, the ONS revealed the UK economy shrank by a 20.4% in April - the largest monthly contraction on record - as the country spent its first full month in lockdown.Last week, the ONS revealed the UK economy shrank by a 20.4% in April - the largest monthly contraction on record - as the country spent its first full month in lockdown.
That is three times greater than the decline seen during the whole of the 2008 to 2009 economic downturn.That is three times greater than the decline seen during the whole of the 2008 to 2009 economic downturn.
Meanwhile, a total of 9.1 million workers are on furlough, according to the latest figures from HMRC published on Tuesday. Meanwhile, the latest furlough figures from HMRC indicate that more than a quarter of the UK workforce is having 80% of their monthly wages, up to £2,500, paid by the government, while they are temporarily off work. Their employer, which chooses whether or not to furlough workers, can top up the remaining 20% if it wishes.
The latest furlough figures indicate that more than a quarter of the UK workforce is having 80% of their monthly wages, up to £2,500, paid by the government, while they are temporarily off work. Their employer, which chooses whether or not to furlough workers, can top up the remaining 20% if it wishes. The Treasury also said there had been 2.6 million claims for support grants from the self-employed.
The cost to the state so far has been £20.8bn. Minister for Employment, Mims Davies, said: "Today's figures are starting to show the impact of Covid-19 on our economy, but our furlough scheme, grants, loans and tax cuts have protected thousands of businesses and millions of jobs, setting us up for recovery.
The figures come as the TUC union body calls for a long-term job guarantee scheme to assist, particularly younger, workers who face losing their jobs. "Already our nationwide network of work coaches have moved in to support jobseekers across sectors and match them with employers who are recruiting. By responding to the needs of communities across the UK they will be at the heart of our revival and renewal."
The Treasury also said there had been 2.6 million claims for support grants from the self-employed, at a cost of £7.6bn.