Nearly a third of lower-paid employees have lost jobs or been furloughed, compared to less than one-in-ten top earners

30 per cent of Britain’s lowest-paid employees have either been furloughed or lost their jobs altogether, according to a new Resolution Foundation report published today (Saturday).

The report, The effects of the coronavirus crisis on workers, based on a survey of 6,005 UK adults and supported by the Health Foundation, examines how the current economic crisis has affected workers’ jobs, hours and working patterns so far, as well as their expectations for the future.

The report shows that Britain’s lowest-paid employees are paying the heaviest economic price in the crisis. Among the lowest-paid fifth of earners before the crisis, 5 per cent have lost their job, and a further 25 per cent have been furloughed.

In contrast, less than one in ten (8 per cent) of the top fifth of earners have lost work (3 per cent) or been furloughed (6 per cent).

Across the workforce as a whole, around 18 per cent of workers have lost work or been furloughed, including 25 per cent of private sector workers.

Excluding those who are self-employed, workers with insecure working patterns are most likely to have lost their jobs or been furloughed. This includes 31 per cent of employees who work variable hours, and 28 per cent of those on zero-hours contracts, compared to 14 per cent of those not in atypical employment.

As well as highlighting the sheer scale of Britain’s labour market shock, the report also shows how important the Government’s Job Retention Scheme (JRS) has been in preventing both mass unemployment and an even bigger living standards hit to families. 15 per cent of employees who worked before the outbreak started said they have been furloughed from their main job.

The report finds that 45 per cent of self-employed workers do not intend to take up the scheme offering grants of up to £7,500 over three months, due either to believing they are ineligible (29 per cent)* or their work not having been affected by the coronavirus crisis (16 per cent). This is potentially lower than expected, given the scheme’s generous terms, and the fact that the vast majority of such workers were believed to be eligible for it.

Turning to the future, the report notes that close to one-in-eight workers (13 per cent) think they will lose their jobs in the coming three months, while nearly a quarter of workers (23 per cent) believe their hours will be reduced.

The Foundation says these findings underline why the Government must combine its dialling down of the JRS over the coming months with a dialling up of wider labour market support to tackle what could be the highest unemployment levels in a quarter of the century.

Policy support should include job guarantees for young people, a huge expansion of training provision, and supporting the creation of green new jobs as a priority for Britain’s post-pandemic labour market.

Hannah Slaughter, Economist at the Resolution Foundation, said:

“Britain’s lowest-paid workers and those with the most insecure work are bearing the brunt of Britain’s economic crisis.

“Close to a third of our lowest-paid employees have already lost their jobs or been furloughed since the crisis began. Thankfully, the majority are having their earnings protected by the Government’s retention scheme. Nonetheless, their job prospects over the coming months are highly uncertain.

“The Government’s bold support measures have avoided unimaginable unemployment rises but the jobs crisis is far from over, with around one in seven workers still fearing they could lose their jobs in the coming months. We now need to see new measures – including job guarantees for young people – to tackle the high levels of joblessness that are likely to be with us long after the pandemic has subsided.”

Notes to Editors

  • Figures are from YouGov plc. Total sample size was 6,005 adults. Fieldwork was undertaken during 6-11 May 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+) according to age, gender, and region.
  • The figures relating to pay, hours and proportion of those furloughed or have lost their jobs are not reflective of YouGov statistics and have been analysed independently by the Resolution Foundation.
  • The findings included in the report come from a survey of workers designed and commissioned by the Resolution Foundation, in partnership with the Health Foundation. The views expressed are those of the Resolution Foundation and not necessarily the Health Foundation. Further analysis of the findings will be published in due course.
  • *Ineligible due to profit levels or because their business is incorporated (17 per cent), or not having completed the relevant tax returns (12 per cent).