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has coronavirus destroyed more jobs than the Great Recession? – Channel 4 News


More Brits claimed unemployment benefits in April 2020 than did even in the worst months of the last financial crash.

We’re going to look at what we know so far about the effects of coronavirus and lockdown on joblessness.

How many people have been furloughed? Which parts of the country have been hardest hit? And is it possible that the economy could bounce back when restrictions are eased?

How many people have been made unemployed since lockdown?

The best estimate we have so far of how many people have lost their jobs since the lockdown started is the “claimant count”. The figure is published by the Office for National Statistics (ONS) every month and estimates the number of people on unemployment benefits like Jobseekers’ Allowance or Universal Credit.

The latest stats show a dramatic leap in the number of people claiming unemployment benefits: from 1.2 million in March to 2.1 million in April. That’s a rise of about 850,000 in a single month.

How does this compare to previous crises?

Early indications suggest that the unemployment associated with the coronavirus and lockdown is already more severe than the aftermath of the 2008 crash. At its peak, that crisis saw 4.9 per cent of adults claiming unemployment benefits (in October 2009 and January 2010).

A decade later, the figure for April 2020 is 5.8 per cent, up from 3.5 per cent the previous month. The graph is pretty striking:

What about when we look further back? The claimant count reached a staggering 10.6 per cent in the spring of 1986 – which remains the highest level since records began in 1971. And the recession of the early 1990s saw 9.9 per cent of UK adults on unemployment benefits for a number of months.

How many workers have been furloughed?

It’s worth bearing one very important fact in mind when comparing the coronavirus with other economic shocks: unlike in previous downturns, the UK government has taken the unprecedented step of paying the wages of private sector employees in a bid to preserve jobs.

Some 8.7 million British workers have been furloughed since the current crisis began – around a quarter of the workforce.

Under the terms of the furlough scheme, employees receive 80 per cent of their usual wages, up to £2,500 a month, from the government. A further 2.5 million claims have been made under the “Self-Employment Income Support Scheme”.

Both schemes are set to continue until October, though employers will be asked to cover some of the costs from August.

We will never know for certain what would have happened if the government had not intervened – but it seems likely that the lockdown would have put many more in the dole queue if they hadn’t.

Which regions of the UK have been hardest hit?

Every region of the UK saw the number of people claiming unemployment benefits increase as a proportion of the population between March and April – with the North East, Wales and Northern Ireland particularly hard-hit.

So what effect have these changes had on the overall proportion of people claiming unemployment benefits?

The North East, which already had the highest rate of claimants before lockdown began, remains at the top of this unhappy table. Some nine per cent of adults in the region claimed unemployment benefits in April 2020, according to ONS experimental data – up from 5.9 per cent the previous month.

The graph below shows each region’s figures for March (in purple) and April (in pink).

Proportionately, the South East (excluding London) has the lowest claimant count of any region as a proportion of its population: 4.5 per cent. Though it too has seen a significant rise since March, when the figure was 2.4 per cent.

What can we expect from the rest of 2020?

The independent Office for Budget Responsibility (OBR) has produced some initial estimates of what the rest of 2020 might hold for the UK economy. The analysts are keen to stress that these are “broad-brush” predictions and should be treated with caution.

With these caveats in mind, the OBR estimates that UK GDP – the combined value of all the goods and services in the whole economy – will fall by 35 per cent in the second quarter of this year, before rising by 27 per cent in the three months after that.

It’s hard to convey in words how unusual both of these changes would be, so let’s put them in context with a graph that stretches back 50 years:

The OBR estimates that the UK unemployment rate could rise to 10 per cent in the second quarter of this year, before declining slightly to 8.5 per cent in the following three months.

Here’s how that looks in historical context:



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