As has been the case for some time, the monthly ONS statistics, released this week, don’t provide an accurate account of what’s really happening in the labour market — everything continues to be distorted by the fact that up to 4 million are estimated to be furloughed. It’s complicated further, because employers have much greater flexibility over how the furlough is used, for how long and for who. In addition, the statistics cover the period from September to November 2020 when restrictions were being loosened and then being reimposed.
But it’s clear that unemployment is higher than the ONS’s 1.72 million (5%) estimate. Gordon Brown grabbed the headlines on Monday with his
claiming it’s already at 2 million and will reach 3.5 million later this year. The 840 000 fall in those on employer pay rolls since the start of the pandemic, suggests it could well be. All that can be said is that the furlough is currently propping up much of the hospitality, retailing and leisure industries, with maybe as many as 2 million workers in ‘zombie jobs’ – roles that probably won’t exist when the measures eventually end. Over a third of employees in these sectors are under 25.
Nevertheless, the ONS data shows unemployment for those 18–24-year-olds ‘not in full-time education’ now at 12.7%, up from 10.2% at the start of the pandemic. Unemployment amongst full-time students in this age group is estimated at 15.4% up from 10.5% a year ago ( this figure, difficult to measure, could be wildly inaccurate, considering the disruption to lives and continued movement by students from home to campus and back again).
The other significant information this week was the evidence that though the Kickstart initiative had created 120,000 six month placements for long term unemployed young people, only 2000 had moved on to full time roles https://www.bbc.co.uk/news/business-55790439 reflecting employers reluctance to take on new workers permanency. The increase in vacancies reported in the summer has now slowed, with the Bank of England’s own quarterly survey noting that while there may be recruitment difficulties for some ‘highly skilled and experienced professions’ (not helped by the post-Brexit exodus of many foreign employees) there had been an ‘increase in the quantity and quality’ of applicants for lower skilled positions.
But if it’s increasingly difficult to enter the labour market, the pandemic has heaped pressure on other parts of the ‘covid generation’ – those on university courses, but in most cases not actually ‘at’ university and now facing another six months of on-line learning, as ‘graduate recruitment’ is put on hold, potentially pushing them down the labour queue still further. The amount of ‘underemployment’ of young people (in the sense that somebody is over-qualified for the work that they do) in the post-pandemic labour market is far more difficult to predict.
‘Underemployment ‘ is also used to characterise those who want to work more hours in addition to the work they do. So, many young people, especially in sectors most affected by the pandemic are just as likely to have had hours cut and are also be in this second category.