One in five young workers on furlough have lost their jobs already

Tom Rees
·2-min read

One in five young workers who were furloughed have lost their jobs even before a bleak winter that is expected to see surging unemployment, new research has revealed. 

Youth unemployment is thought to have hit 20pc - the highest since the aftermath of the financial crisis - as inexperienced workers bear the brunt of the jobs crisis, the Resolution Foundation warned.

Its economists urged the Chancellor to take a “more proactive” approach to job creation after finding that most unemployed people are struggling to find new work.

Those aged 18 to 24 are the least likely to have returned to work after losing their job. They are also more likely to have been laid off and in sectors hardest hit by the pandemic, such as hospitality and retail.

The think tank revealed that 17pc of those in work before the Covid crisis were still not back in full employment, including those no longer working, are furloughed or whose pay or hours have been cut. 

Black, Asian and Minority Ethnic (BAME) workers and those on insecure contracts were also disproportionately affected by the economic crisis.

Its report paints a gloomy picture of the labour market even before a second wave of Covid-19 cases hit. 

Forecasters expect the jobless rate, which stands at 4.5pc, to rise sharply over the winter months as local lockdowns pile pressure on businesses.

The furlough scheme ends on Saturday with businesses then able to access a less generous successor.

Kathleen Henehan, Resolution Foundation analyst, said the unemployed's struggle to find new work suggested that “even if the public health crisis recedes in a few months’ time, Britain’s jobs crisis will be with us for far longer”.

She said: “Around one-in-five young people, and over one-in-five BAME workers, have fallen straight from furloughing into unemployment.” 

London, the country’s economic powerhouse, has become the epicentre of the jobs crisis, accounting for a quarter of those still not back in full employment. 

Devastated by the homeworking boom and a dearth of tourists, the capital had suffered the “most significant disruption” from the pandemic, the Foundation’s economists said.

Furlough claims were highest in London up until the end of August and a 3.5pc drop in London-based employees was by far the worst among the UK regions. 

The Foundation argued there was a case for expanding the Chancellor’s furlough scheme to more firms and urged Rishi Sunak to take a “proactive” approach to job creation.

"The firms that now stand out as not having access to support to hold onto workers are those that are not legally required to close but which in reality cannot open, such as conference centres," the report said.

Have you been on furlough during the pandemic? Where has that left you now? Share your story in the comments section below.