Business

Low-paid workers bear brunt of coronavirus recession

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Almost a third of Britains lowest-paid workers have lost their job or been furloughed in the past two months as those earning least bore the brunt of Britains Covid-19 economic shutdown, a thinktank has said.

The Resolution Foundation said 30% of those in the lowest income bracket had been affected by the damage caused to the labour market by the pandemic, compared with only 10% of those in the top fifth of earners.

Its survey of more than 6,000 workers found that the governments furloughing scheme was shielding many of the UKs low-paid workers from losing their jobs altogether.

Even so, the impact of the lockdown on those sectors where low pay is most common – retail and hospitality – meant 5% of those in the bottom fifth of earners had been laid off alongside the 25% who were not working but were receiving the Treasurys wage subsidies. The scheme, under which people are paid 80% of monthly earnings up to a ceiling of £2,500, was extended until the end of October by the chancellor, Rishi Sunak, this week.

The thinktank said that across the whole workforce, around 18% per cent of workers had lost work or been furloughed, including 25% of private sector workers. However, only 3% of those in the top income group had lost their jobs, with a further 6% being furloughed.

Excluding the self-employed, the survey showed that workers with insecure working patterns were most likely to be made redundant or furloughed, including 31% of employees working variable hours, and 28% of those on zero-hours contracts. Only 14% of those not in atypical employment have been affected.

The report also found a lower than expected take-up for the separate government scheme for the self-employed, which offers grants of up to £7,500 for three months. Almost a third of the self-employed (29%) believed they were ineligible because of the terms of the scheme, while a further 16% said they had not been affected by the crisis.

Hannah Slaughter, economist at the Resolution Foundation, said: “The governments bold support measures have avoided unimaginable unemployment rises, but the jobs crisis is far from over, with around one in seven workers still fearing they could lose their jobs in the coming months. We now need to see new measures – including job guarantees for young people – to tackle the high levels of joblessness that are likely to be with us long after the pandemic has subsided.”

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