It is still too early to assess the real, longer term effects of the pandemic on the labour market; but as the furlough winds down, even if some businesses have reopened, this month’s figures show that (official) levels of employment have fallen by significantly. Overall, employment is down by nearly half a million since the crisis began – with unemployment rising to 4.5%. In addition to this, according to some estimates, there are likely to be a further half a million people who were still being counted as employed but were away from their jobs and not being paid.
As expected, young people appear to be bearing the brunt of the labour market crisis. Over half of the fall in employment is accounted for by fewer young people in work. The youth employment rate is now at its lowest for months – down to 61% for the 18-24 age group (unemployment standing at 12.3%) and 75% for those not in full-time study (unemployment at 11.3%).
The ONS figures cover May to July 2020. Student unemployment traditionally rises at this time as campuses empty for summer vacations. This year, because of early closures, rates have been much higher – with 1 in 5 students recorded as being unemployed at the end of the quarter, as well as increases ‘economic inactivity’.
Meanwhile, apprenticeship opportunities (supposedly an alternative to university study) continue to dwindle, with only a third as many starts for the year ending this July for those under 19 (just 5000), compared with the same point last year- and less than half for those 19-24 compared with previously. Without a massive injection of government funds, we should fear for the very future of the scheme.