U.K. Jobless Claims Soar To Highest Levels Since 1996

TOPLINE

The devastating impact of coronavirus lockdowns on the U.K. labor market is now emerging: jobless claims climbed to their highest levels on record as more than 850,000 people registered for unemployment benefits in April alone.

KEY FACTS

Additional info

The number of adults in work was at a record high before the lockdown came into effect. Employment was at 76.6% in the three months to March. The data counts people in employment aged 16 to 64 in the U.K..

Young people—those aged between 18 and 24—are some of the hardest hit and could face longer term impacts on their pay and careers. One in three young workers have lost work or have been furloughed amid the crisis,  compared to one in six 35 to 49-year-olds, separate figures from the Resolution Foundation show. Around 35% of young people are earning less now than they did before the outbreak.

Crucial comment

The report from the think tank says: “The large proportion of 18-24-year-olds on furlough and who have lost their main job is particularly worrying because these people are at the beginning of careers…young people who have recently left education and have recently entered, or are about to enter, the labour market are more susceptible to long-term employment and pay scarring.”

Key background

Jobless figures are likely to worsen as the latest data only shows the early impact of lockdown measures. The U.K. government announced a shutdown of non-essential businesses on March 23rd, with millions of workers ending up furloughed or out of work. It is now spending a staggering £14 billion ($17 billion) a month on a furlough scheme in which 80% of a worker’s wages up to £2,500 ($3,000) are paid. The government recently extended the scheme until October in a bid to avoid mass job losses.

Tangent

The U.S. has seen an unprecedented 30 million people file for unemployment benefits in six weeks as the coronavirus wreaks havoc on the economy.

Further reading

Young workers in the coronavirus crisis (Resolution Foundation)

Labour market overview, UK: May 2020 (ONS)

What Do 30 Million Unemployment Claims Actually Look Like? (Forbes)

U.K. Economy Shrinks At Fastest Pace Since 2008 Financial Crash (Forbes)

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