UK Edition
Up to two million workers have lost their jobs already as the coronavirus crisis strikes the biggest blow to British employment on record, experts have said.
It means Covid-19 has wiped out the past five years of employment growth in a matter of weeks as companies scramble to sack staff during the lockdown, despite unprecedented support from taxpayers.
The Institute for Employment Studies (IES) said the loss of between 1.5 million and 2 million jobs comes on top of those workers who have been furloughed by bosses who would have let them go but are instead using a state-funded scheme to keep them on payroll.
It is more than twice as big a crunch as during the financial crisis, when employment fell by a peak of 740,000. The drop amounts to a cut of around 5pc of those in work.
Nothing like this has been seen since official labour market monitoring started in 1971. Such a hit will take the unemployment rate up from 3.9pc - a 45-year low - to 7.5pc, close to the peak rate in the financial crisis.
It is now expected to take years for employment to get back to its recent peak of almost 33 million people.
The IES said: “It is highly unlikely that we will see a steep recovery in employment or unemployment in the near future, and we expect that it will take years rather than months for the labour market to fully recover."
Young people and women are most in danger of losing their jobs, the organisation said. Both groups often work in the retail and leisure industries, which it warned are particularly vulnerable after being forced to close down completely.
If former employees are out of work for a long time, it becomes increasingly hard for them to find another job and get their careers back on track.
The IES said: “These ‘scarring’ effects are likely to be particularly pronounced in this recession, as the nature of the lockdown means that those who become unemployed now will find it harder and take longer to get a new job."
It proposes a large-scale programme to help those newly out of work, hiring recruitment agencies and other private sector firms to aid Job Centres as their workload vastly increases.
The IES said: “This support will need investment. However this will likely pay for itself in fiscal terms, and will far outweigh the potential economic and social consequences of inaction."
Wage subsidies could help get people back into work, as could major retraining schemes to make sure the unemployed maintain vital skills.