UK job losses hit 720,000
The economic impact of lockdown and Covid means UK job losses hit 720,000 since March. The number of self employed has fallen, and benefit claims have risen.
What are the figures?
Since March 2020;
- 720,000 reduction in payroll numbers.
- 238,000 reduction in the self employed
- 1.4 million extra benefits claims.
- Average pay down 1.2%
Payroll numbers means people employed and paying tax via PAYE. Benefit claims means mostly Universal Credit claims. 2.7 million of us are now claiming benefits for unemployment or reduced incomes.
These charts show the dramatic impact of these numbers.
Firstly, the decline in payroll jobs compared to the previous increases in the last few years;
Secondly, the increase in benefit claims this year compared with previous years;
But official unemployment has not increased!
The official unemployment rate for June (latest month available) has not increased. It is still 3.9%, which is an historic low. This is due to a ‘quirk’ in how unemployment is measured. To be counted as unemployed, we have to be “looking for work” as well as being out of a job. The ONS have discovered that many of us have simply given up, or are waiting for lockdown measures to be relaxed so we can go back to our previous jobs.
The ONS explain it like this;
Between January to March 2020 and April to June 2020, the number in these groups – the inactive who may begin to seek work and who are temporarily away from work for coronavirus-related reasons, without earnings – increased by 1.03 million to 2.13 million (Figure 6). This increase of people who are around the fringes of unemployment may explain why unemployment under the ILO definition has not increased.”
In fact, the ONS say there are a total of 7.5 million of us who are “temporarily away from paid work”. This includes everyone on Furlough schemes.
Also, there has been a large increase in those of us on “zero hour contracts” which means over 1 million of us are now employed on this basis. This type of employment means we have variable hours usually without a guaranteed minimum.
What does this all mean?
The economic fall out from the Covid pandemic and Lockdown policy response has been significant. It has resulted in fewer jobs and less income for millions of us. The picture is also confused as a result of the various government schemes designed to minimise the impact on jobs, such as Furlough.
According to Jonanthan Athow of the ONS:
“The UK labour market has been profoundly affected by the pandemic. The effects, however, have been complex and different from how the financial crisis played out…people are losing jobs and employment is falling. But the falls are relatively modest compared to the huge falls in GDP…The number of people on the payroll fell by just over 100,000 in July and is down 700,000 since March…Up to 5 million people in total looked to be furloughed in June…Part of that furloughing picture includes just under half a million people between (Apr-Jun) who tell us they are employed, but away from work and not being paid”
What to learn more?
Click here for comments from the ONS
You can read the ONS press release here
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The ONS is the Office for National Statistics. They are the official government agency for economic data. Graphs sourced from the ONS press release.