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Young people and disadvantaged areas bearing the brunt of the jobs crisis

Commenting on the latest jobs figures, Tony Wilson, Director of the Institute for Employment Studies, said: “Today’s figures show that the jobs market continued to weaken through the summer, with further large falls in paid employment and self-employment and the number of people claiming unemployment- related benefits continuing to rise.

“All told, there are at least one million fewer people were in paid work by July than in March, with the number of paid employees down by three quarters of a million and the number of people self-employed falling by a quarter of a million.  This is a virtually unprecedented reversal, but would have been far worse without the government’s Job Retention Scheme and self-employment income support.

“So far, these falls have not fed through into the official measure of unemployment for two reasons: first because many of those losing paid work are saying that they have jobs to go back to, and secondly because the official measure only counts those who were actively seeking a new job.  It appears that far fewer people were seeking work during the full lockdown, which is the period that the official data covers.

“Looking beneath the headline measures there are worrying signs that younger people are being particularly hard hit, with nearly one in seven now claiming unemployment-related benefits – up from fewer than one in fifteen before the crisis began.  This is a faster increase than for any other age group, with young people facing a double whammy from both job losses and falls in hiring. 

“Meanwhile in twenty local areas, more than one in eleven residents are on the claimant count – with this dominated by inner cities (particularly in London), ex-industrial areas and coastal towns.  Many of these areas also had the highest levels of worklessness and faced the most significant disadvantages before the crisis began.

“The one bright spot in today’s figures is that the fall in vacancies appears to have bottomed out, with a significant and somewhat surprising bounce-back in notified vacancies in the single-month estimate for July. At 470 thousand this remains well below pre-crisis levels, but is in line with what we saw in the recovery from the last recession.

“Looking ahead, it’s likely that in the next few months we’ll start to see unemployment rising as more of those out of work start looking for new jobs, as well as likely increases in redundancies as the various support schemes start to unwind.  It’s imperative then that the government starts to put in place the measures announced last month in its plan for jobs – particularly the new Kickstart scheme for young people and the big expansions of support available through Jobcentre Plus and employment services.  However even with these measures, it looks likely that we may yet need more in the autumn spending review to support hiring and new job growth.”

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