The coronavirus pandemic is responsible for what appears to be the worst recession since the second world war. People from countries around the globe (developed, developing, emerging) lose their jobs at a much faster rate than initially anticipated .
Due to the economic lockdown taking longer than initially thought, many companies were forced to lay off staff, creating one of the worst jobs markets in history. Despite strong government intervention, the number of unemployed increased at a rate never seen before. With many now fearing it will be impossible to create them back at a similar pace.
The United Kingdom’s Jobs at Risk
The UK finds itself in a strange position in the fight against the currency economic climate. On its way out of the European Union, the United Kingdom has 7.6 million total jobs at risk, with a large proportion in areas like accommodation and food services, arts, entertainment and recreation, or wholesale, retail, and the repair of vehicles.
In the first half of April of this year, no less than 20% of the UK working-age population were furloughed – more precisely, 9 million people. While this is just a temporary leave of employees due to special needs, the big question is, what happens when the government support starts to be withdrawn? Can businesses continue to employ and pay workers? The risk is that a large proportion of the furloughed employees will not find their way back into employment.
As it is the case with other major economies (e.g., Eurozone, United States), the most at risk are the most vulnerable workers. More precisely, those in low-income categories have a bigger chance of being furloughed or laid off.
For instance, jobs in the IT sector with a median gross hourly pay of GBP 19.20, are less affected than jobs in hospitality and food services activities, paid with a median gross hourly wage of GBP 8.6. Overall, across United Kingdom industries and sectors, more than half of those jobs classified as at risk are the ones that pay less than GBP 10 an hour.
Also, part-time workers are among those that suffer most of the consequences. While accounting for 24% of the United Kingdom’s workforce, they account for 35% of jobs at risk.
The conclusion of a study like the one run by McKinsey reveals what governments need to do to better face this crisis – prioritize helping the vulnerable. The success of their actions will have a direct impact on the economic recovery.