Posted-on September 2020 By Amy Bates
The effects of Covid-19 and quarantine measures have hit economies hard, and millions of people have been unable to work. The impact on jobs has been 10 times bigger than that of the global financial crisis.
Although millions of workers have been furloughed or moved onto reduced hours, millions of others have lost their jobs entirely, with little progress in sight.
According to a recent report conducted by OECD.org, unemployment is predicted to reach nearly 10% in OECD countries by the end of 2020, up from 5.3% at year-end 2019, and to go as high as 12% should a second pandemic wave hit. There is no expectation of recovery until after 2021.
How Covid-19 will impact UK employment?
The government’s Coronavirus Job Retention Scheme has helped reduced the number of jobs lost to date, but unfortunately not all workers have been able to return to their jobs as normal.
As the furlough scheme is coming to an end, and employers are being asked to pay a larger proportion towards their employees’ costs, unemployment is beginning to rise. This is due to businesses not being able to afford to start paying their workers again and having to let them go.
Figures obtained by a BBC Freedom of Information request showed that 300,000 redundancies were planned in June and July alone.
Despite government support measures and even if without a second wave, employment in the UK is predicted to fall by 4.6% in 2020, and only rise by 2.1% in 2021.
Therefore, the UK is expected to hit record levels of unemployment by the end of 2020 (Q4) of up to 11.7% and only decline by 7.2% in 2021. (This goes against the record low in 2019 (Q4) of 3.8%.)
If there is a second wave, unemployment in the UK could reach 14.8% by end 2020 (Q4).
Globally, unemployment is predicted to reach a record high by the end of 2020.
The OECD forecasts that OECD-wide employment is expected to decrease by 4.1% in 2020 and to rise by just 1.6% in 2021. As a result, by the end of 2020 (Q4), the OECD unemployment rate is expected to hit record highs of up to 9.4% and fall to only 7.7% in 2021. If there is a second wave, the crisis will be even worse and more prolonged.
The report also showed that in April 2020, on average across 11 OECD countries, workers in the top earnings quartile were, on average, 50% more likely to work from home than those in the bottom quartile, who were twice as likely to have stopped working.