ONS: employment plummets by largest margin in a decade

Employment fell by 220,000 between April and June, according to Office for National Statistics (ONS) survey, the largest decrease in over a decade

This was the biggest decrease since May 2009, when the UK was going through a financial crisis.

ONS figures show that the self employed workforce took the hardest hit, which is not reflected in employees.

In particular, there were 28.02m employees (85.1% of all people in employment), 52,000 more than the previous quarter, and 4.76m self employed people (14.5% of all people in employment), a record 238,000 fewer than the previous quarter.

Workers aged 65 years and over had a sharp fall as they decreased by a record 161,000 to 1.26m. This was partially offset by those aged 25 to 64 years, who increased by 41,000 on the quarter to 27.94m, and those aged 16 to 24 years decreased by 100,000 to 3.72m.

Howard Archer, chief economic advisor to the EY ITEM (Independent Treasury Economic Model) Club, said: ‘The pandemic’s impact on the labour market has been substantially limited by companies’ ability to furlough workers under the government’s Coronavirus Job Retention Scheme. Latest data from the Treasury show that the job retention scheme has covered 9.4m workers.

‘However, the Bank of England estimates that around 4m of those have now returned to work.’

Archer added: ‘The number of job vacancies rose to 370,000 in the three months to July after falling to 333,000 in the three months to June, which had been the lowest level since the series began in 2001 and down from 476,000 in the three months to May, 642,000 in the three months to April and 818,000 in the three months to February.’

The ONS suggests the job vacancy increase was driven by the smaller businesses, some of which are reporting taking on additional staff to meet Covid-19 guidelines.

The largest decrease was in routine occupations eg, construction, bar staff and cleaners. These jobs were down 325,000 (or 11.3%) on the year and 195,000 (or 7.1%) on the quarter, indicating these occupations have been most affected by the coronavirus lockdown measures introduced in March 2020.

Lorna Carter-Blake, MD of DA Training and Consultancy, said: ‘I expect the number of people in self employment to rise sharply, as the jobs just won’t be there for them. So the government shouldn’t just be focused on getting people back into conventional jobs but also help them to set up on their own.

‘To cease the furlough scheme at the moment is counter-productive. People are going to lose their jobs if businesses are still struggling to trade or turn a profit. The furlough money will then just have to move into the benefits system, as more people claim benefits due to unemployment.’

Useful links:

ONS full report: Labour market overview, UK: August 2020

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