Young and ethnic minority individuals are being hardest hit by post-furlough job losses, a report has found, warning that the winding down of the job support scheme could lead to a dramatic rise in unemployment across the UK.
The report by the Resolution Foundation found that nearly a fifth (19 per cent) of young people aged between 18 and 24 who were furloughed during lockdown were unemployed in September.
For ethnic minority workers this figure was 22 per cent, compared to just 9 per cent of the general population.
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A similar number (22 per cent) of those furloughed from insecure work during lockdown were also unemployed in September.
Kathleen Henehan, senior research and policy analyst at the Resolution Foundation, said unprecedented government support had cushioned many people from the initial economic impact of lockdown. But as support started to wind down, “the true nature of Britain’s jobs crisis [was] starting to reveal itself”, she warned.
“Worryingly, fewer than half of those who have lost their jobs during the pandemic have been able to find work since,” Henehan said, adding that even if the public health crisis caused by the virus receded in the next few months, Britain's job crisis could last much longer.
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The think tank’s report estimated unemployment in the UK reached 7 per cent in September, rising to 20 per cent among young workers. This was much higher than the most recent official figures from the Office for National Statistics (ONS), which put unemployment for the three months to August at 4.5 per cent.
The ONS said around 300,000 people aged 16 to 24 were out of employment over this period, which represented an approximate 60 per cent of the fall in employment for this demographic since March.
Sandra Kerr, race director at Business in the Community (BITC), described the report’s findings as “alarming but sadly not surprising”. From the early days of the furlough scheme, BITC warned those already vulnerable – including ethnic minorities and the youngest and oldest workers – would be most affected by redundancies, she said.
“Any hope that these effects will be short lived is not realistic – existing inequalities are providing a stubborn and persistent challenge,” Kerr said. “Unfortunately we appear to be on the brink of one of the worst jobs crises this country has ever seen.”
But, Kerr said, the unequal impact of the pandemic was not inevitable and employers could still choose to do the “right, responsible thing”. “Any business facing tough choices about cost cutting should use equality impact assessments to make sure they do not disproportionately affect one group more than another,” she said.
The Resolution Foundation’s report also found only 43 per cent of workers who had been furloughed and subsequently lost their jobs since March had found new work by September. This dropped to 33 per cent for young people, compared to 57 per cent of those aged 35 to 44.
The think tank also found workers who previously worked in the hardest-hit sectors – including hospitality and leisure – had found it more difficult to return to work. Only a third (36 per cent) of those in these sectors were back in work by September, compared to 45 per cent across other sectors.
The latest official figures from the ONS showed 9 per cent of the UK’s workforce – equivalent to more than two million people – were still furloughed with just a week left before the scheme closed.
Abdul Wahab, diversity and inclusion adviser at the CIPD, said employers should consider their organisational make-up to avoid falling foul of equality law when making redundancies. “Within the Equality Act, there is a requirement to act fairly in terms of how people are selected for redundancies, so you need to have your organisational data there," he said.
By collecting workforce data, employers could monitor whether a disproportionate amount of people from one group had been selected for redundancy, Wahab said, which could help prevent potential tribunal claims later down the line.
"Employers should have that paper trail there to show they've monitored how the redundancy selection process is carried out, that they've done what they're supposed to and there's been a fair process in place,” he said.
Separately, in response to rising youth unemployment caused by the coronavirus outbreak, the CIPD has relaunched its mentoring programme to focus on supporting young people into work.
The Steps Ahead Mentoring programme will match young people with CIPD members who will act as mentors, giving advice on job searching, writing CVs and applications, and interviewing. Mentors will also help their mentees improve their confidence, build professional networks and set career goals.
First launched in 2012 to help parents and carers returning from a career break, the mentoring programme was “needed now more than ever”, said Jemeela Quraishi, social impact and innovation lead at the CIPD. “With research showing that youth unemployment can have a long-term impact on mental health, earnings and career progression, we’re pleased to direct the focus of Steps Ahead where it’s needed most,” she said.
CIPD members interested in becoming a mentor through the programme can find out more here.