Britain’s jobs crisis bites as employee jobs fall by 450,000 and vacancies dry up at record rates

Response to ONS labour market statistics May 2020

The number of employees fell by 450,000 in April, while vacancies crashed by around 50 per cent, giving an early indication of the scale of the jobs crisis Britain is currently experiencing, the Resolution Foundation said today (Tuesday) in response to the latest ONS figures published this morning.

Flash estimates from HMRC’s PAYE real-time information show that the number of paid employees fell by 450,000 (1.6 per cent) between March and April this year, to 28.6m. This fall excludes the estimated 7.5 million jobs that have been furloughed since the crisis began.

This scale of this labour market shock is mirrored in the latest vacancies data, which showed a 400,000 fall between early March and early April – a fall of 50 per cent.

Further indications of the speed and scale of Britain’s jobs crisis were shown in the 850,000 increase in the claimant count between early March and early April. This figure will include some people claiming benefits while working, as well as previously self-employed earners who have seen work dry up, and employees who’ve lost jobs.

The Foundation notes that the claimant count increase is lower than the 1.4 million Universal Credit claims made between mid-March and early April. That’s because new UC claims will reflect not just rising unemployment, but also income falls from furloughing or hours reductions, and the increased generosity of benefits, says the Foundation.

It notes, for example, that the average number of hours worked has fallen in the last week of March by 8.4 hours per week compared to the same week last year (from 33.2 to 24.8 hours). The number of temporary absences from work increased by 2.6 million to 7.4 million people.

Resolution Foundation research published today, based on a survey of 6,005 adults in early May, found that young workers were more likely to have experienced pay reductions, furloughing or job losses than other age groups. Workers in their early 60s were also disproportionately affected.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“Today’s figures highlight the speed and scale of Britain’s job crisis. Employee numbers have fallen by nearly half a million in just one month, while the number of vacancies has halved.

“These shocking figures would be far worse were it not the Job Retention Scheme, which has so far protected 7.5 million jobs.

“But even despite widespread furloughing, Britain could still be facing the highest unemployment levels it has had in over a quarter of a century.”