Young people and ethnic minorities most likely to be laid off after furlough

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Young people and ethnic minorities were most likely to be made unemployed after coming off furlough, according to a report by the Resolution Foundation.

The think tank’s survey of around 6,000 workers found that 19% of 18- to 24-year-olds who were furloughed during lockdown were unemployed in September. Twenty-two percent of black, Asian and minority ethnic (BAME) workers were made redundant, compared to 9% of the population.

The furlough scheme ends this week after a gradual wind-down of government support from 80% of an individual’s wages at the start of the pandemic to 70% and 60% in September and October respectively.

From 1 November, furlough will be replaced by the Job Support Scheme, which will see the government funding a portion of hours not worked, depending on which tier of coronavirus restrictions the employer operates in.

Overall, according to the Resolution Foundation, only 43% of those placed on furlough had returned to work by September, while a third were still on full or partial furlough last month.

This figure fell to 33% for young people, and was 36% in the hospitality and leisure sector, which was heavily impacted by closures during lockdown.

Kathleen Henehan, a researcher at the think tank, said: “The first eight months of the Covid crisis have been marked by an almighty economic shock and unprecedented support that has cushioned the impact in terms of people’s livelihoods.

“But the true nature of Britain’s jobs crisis is starting to reveal itself. Worryingly, fewer than half of those who have lost their jobs during the pandemic have been able to find work since.

“This suggests that even if the public health crisis recedes in a few months’ time, Britain’s jobs crisis will be with us for far longer.”

Of those respondents who were still employed by September, 12% said they were being paid less than they were in February, with pay reductions more common in harder-hit sectors and young workers. Pay cuts have become more evenly distributed as the crisis has evolved, however, the think tank said.

The Resolution Foundation also found that there was little evidence to suggest that workers hit by the crisis were moving to less affected sectors of the economy. People who previously worked in hospitality, leisure, or non-food retail were most likely to be looking for a new job in one of those same sectors or administrative positions, it said.

Even those who have remained in work are worried about future redundancies: more than a quarter of respondents who were still in work last month are worried about redundancies occurring, have been told a redundancy process either may or will happen, or have been told they will be made redundant.