Third of lowest paid have lost jobs or been furloughed

Lowest paid are bearing the brunt of the jobs hit during the coronavirus pandemic, says a new report as figures show more than a fifth of employers plan to make redundancies over the next three months.

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Thirty per cent of lowest-paid employees have either been furloughed or lost their jobs altogether during the coronavirus pandemic, compared with just eight per cent of the highest earners, according to a new Resolution Foundation report.

The report, The effects of the coronavirus crisis on workers, based on a survey of 6,005 UK adults and supported by the Health Foundation, examines how the current economic crisis has affected workers’ jobs, hours and working patterns so far, as well as their expectations for the future.

The report shows that among the lowest-paid fifth of earners before the crisis, five per cent have lost their job, and a further 25 per cent have been furloughed.

In contrast, less than one in 10 (eight per cent) of the top fifth of earners have lost work, with double the number being furloughed than have lost their job.

Across the workforce as a whole, around 18 per cent of workers have lost work or been furloughed, including 25 per cent of private sector workers.

The report says that, excluding those who are self-employed, workers with insecure working patterns are most likely to have lost their jobs or been furloughed. This includes 31 per cent of employees who work variable hours, and 28 per cent of those on zero-hours contracts, compared to 14 per cent of those not in atypical employment.

The report finds that 45 per cent of self-employed workers do not intend to take up the scheme offering grants of up to £7,500 over three months, due either to believing they are ineligible (29 per cent) or their work not having been affected by the coronavirus crisis (16 per cent). The report says this is potentially lower than expected.

Nearly to one in eight workers (13 per cent) think they will lose their jobs in the coming three months, while nearly a quarter of workers (23 per cent) believe their hours will be reduced.

The Foundation says these findings underline why the Government must combine its dialling down of the JRS over the coming months with a dialling up of wider labour market support to tackle what could be the highest unemployment levels in a quarter of the century.

It says policy support should include job guarantees for young people, a huge expansion of training provision, and supporting the creation of green new jobs as a priority for Britain’s post-pandemic labour market.

Meanwhile, research by the Chartered Institute of Personnel and Development and recruiter Adecco shows that more than a fifth of employers plan to make redundancies over the next three months, with 15% expecting to cut pay and 29% likely to reduce bonuses. Just two in five employers plan to recruit new staff in the three months to July 2020, the lowest level since the survey began in 2005. However, the Labour Market Outlook report highlighted the importance of the Government’s furlough scheme in reducing redundancies, at least for now. It found employers making use of the scheme said that they would, on average, have made 35% of their workforce redundant without it. On pay,  a third plan to freeze employee pay as a result of the virus. This increased to 51 per cent among private sector employers.



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