The coronavirus pandemic has worsened inequalities in work and incomes, hitting groups including young people, single parents, and people from BAME backgrounds hardest, according to a new report.
The research – published by leading employment and skills think tank Learning and Work Institute to mark the anniversary of the first lockdown – lays bare the unequal effects of the pandemic. Worryingly for the Government’s commitment to ‘levelling up’, the number of people claiming unemployment-related benefits has risen three times faster in areas with the highest pre-crisis unemployment than in lower-unemployment areas. Areas that have higher BAME populations have seen claimant rates rise more than three times faster than areas with lower BAME populations, and two times the national average.
Young people account for one half of the falls in employment, despite accounting for only 12% of total employment. Single parents and low paid workers are among those who have faced falls in their incomes and so face challenges to get by too. For example, single parents saw their working hours fall by 26%, more than other groups, and were more likely to say it was difficult to manage financially during the pandemic. They are more likely to be affected by the planned end to the £20 per week Universal Credit uplift in September.
Overall, unemployment is expected to be almost one million higher by late 2021 compared to before the pandemic. However, a further 2.5 million people could have lost their jobs without the furlough scheme preventing employment dropping in line with economic output. Nonetheless, long-term unemployment, particularly damaging to people’s future job and earnings prospects, is already up by 25% in the last year and likely to rise sharply during 2021.
With the successful rollout of the vaccine programme, the Government needs to focus on recovery from the impacts of the pandemic and building a better and more inclusive economy for the future, not simply a return to ‘business as usual’. This means fixing the structural economic weakness that pre-dates the pandemic, and harnessing shifts like the transition to net zero and increased remote working and online shopping.
The new research identifies five priorities for the Government as the economy reopens: