As 2020 ends, is the Jobs Crisis Just Beginning?
As the Health Secretary, Matt Hancock said while feigning a tear for Piers Morgan, "this has been such a hard year for so many people". But as 2020 draws to a close, and a solution to the UK's health crisis appears on the horizon, the latest Government statistics suggest the economic crisis is just beginning and that the hardship has not fallen equally.
Unsurprisingly, unemployment has risen in 2020. Overall, there has been a 22.5% increase in unemployment since the start of the year - rising from 4% to 4.9%. But by digging deeper into the figures, we see how the jobs crisis is still developing.
Initially, women saw a faster increase in unemployment, with no overall increase amongst men until July. However, the figure for men has since overtaken that of women, rising to a 26% increase, compared to 24%.
A more distinct disparity of impact can be seen along race lines. Quarterly figures show that the increase in unemployment amongst those identifying as an ethnic minority was 35%. In some groups - mixed-race men - the increase was as high as 133%.
Class is also a clear dividing line when looking at where unemployment has been felt hardest. The fall in employment in 2020 occurs despite significant increases in managerial and professional positions. Instead, it is technical, routine and semi-routine occupations that have been lost.
Looking at different age groups particularly illustrates how this crisis is still unfolding. In the initial months of the pandemic, the under 35's suffered most, seeing a 9.5% rise in unemployment by May. In the same period, unemployment stayed level for 35 to 50-year olds and saw a sizeable reduction amongst the over-50's. However, through the summer and autumn, we saw a waterfall effect as first the over-35's then the over-50's gradually rose to similar levels as in younger generations.
As with the financial crisis of 2008, it is unlikely that jobs will return and the economy will simply recover to its former state. Without significant policy interventions and investment, mass unemployment will resolve to underemployment, an increase in insecure work and a further worsening of working conditions. Before the pandemic, the official unemployment rate was at a 35-year low. But this figure doesn't tell the whole story. Underemployment - those working fewer hours than they would like - part-time work by those who cannot find full-time work, and zero-hours contracts were all higher than pre-2008 levels.
If spring and summer brought the first wave of a crisis, hitting the most vulnerable, autumn and winter have witnessed the effects spilling over onto the seemingly secure. Next year will see the knock-on effects of these job losses plus a fresh wave of unemployment if the furlough scheme is removed. Beyond this, the pressure created by such unemployment will continue to drive down wages and force more people into insecure work.
With State borrowing rates at record lows and spending on interest falling despite increased borrowing, the Government must invest in creating secure jobs while continuing to subsidise reduced working hours. As well as saving millions of undeserving people from hardship, a targeted job creation scheme with an ambition that meets the scale of this crisis presents an unprecedented opportunity. Alongside the simultaneous problems of unemployment, underemployment and overwork, we could address the other crises facing the UK, by greening our economy, restoring our public services and building a fit-for-purpose care sector that gives our ageing population the respect they deserve.
For many working people, the UK economy never recovered from 2008. We have seen a decade of stagnating wages and increasing precarity. Without meaningful intervention from the Government, we will have another.