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650,000 Workers Have Dropped Off Payrolls Since the Pandemic Began

An indication of the extent of the damage done to the British economy by the coronavirus pandemic can be seen with the latest unemployment figures. The numbers from the Office for National Statistics (ONS) show that there are now almost 650,000 fewer people in paid employment than in March.

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The ONS report suggests that the number of people in paid employment fell by 2.2% from the start of the crisis in March through to June. This represents a decline of 649,000, although it is noted that the rate of people losing their jobs was slower in June than in May.

Another sign of the dramatic effect of the lockdown across the country was the reduction in the number of hours worked. The study looked at the number of hours worked between March and May, then compared this total to the same period from last year.

This comparison showed that the number of hours worked in the UK fell by 175.3 million, to 877.1 million. It was the sharpest drop in recorded history, with a 16.7% fall from 2019 to 2020.

Frances O’Grady, who is the general secretary of the TUC, called it “a national disaster” that is unfolding in front of us. Many companies are currently using the debt collection process to recover money owed to them, to get through this extremely difficult year.

It is worth noting that the official unemployment figures haven’t shown a huge difference. The numbers for May showed no change from April, with the number of jobless at 3.9%. However, this fails to take into account the 9.4 million jobs that the government has been subsidising on the furlough scheme.

The massive number of workers on the furlough scheme aren’t counted as being out of work. According to the ONS, up to half a million other workers haven’t been going to work but haven’t received any pay during this period.

What Can We Expect to Happen Next?

It is expected that this trend will contine, as a number of major companies have recently announced plans to cut jobs. A further fear is that unemployment numbers will grow even more once the furlough scheme begins to wind down later this year, with a closing date of October set.

A report from the British Chambers of Commerce (BCC) suggests that close to a third of companies will be making job cuts in the next three months.

The BCC surveyed 7,400 businesses across the UK and found that 29% of them are planning to reduce their workforce in the next three months. This is the highest rate they have seen since they began this type of survey back in 1989.

The Office for Budget Responsibility (OBR) has already warned that they expect between 10% and 20% of the workers currently being furloughed to be laid off.

In each of the three different scenarios laid out by the OBR, they expect unemployment to double and the jobless rate to rise to 12% by the end of 2020.