New analysis published today (Friday) by the TUC shows that young workers (aged 25 and under) face the highest risk of unemployment due to the coronavirus crisis.
The analysis compares unemployment risk related to the coronavirus crisis across industrial sectors. And it looks at the age profile of workers in sectors with highest risk.
Sectors at highest risk
Workers in all sectors of the economy face unemployment risks due to the coronavirus crisis and the recession that is expected to follow.
However, two sectors are at much higher risk of losing jobs compared to others: ‘accommodation and food’ and ‘arts, entertainment and recreation’.
Our analysis uses three measures to assess risk: (1) the rate of furloughed workers, (2) the proportion of businesses that have paused or cancelled trading, and (3) the proportion of businesses with turnover falling more than 50%.
These two sectors not only rate the highest for all three measures, they are also in a league of their own, with rates far exceeding the construction sector in third place.
Businesses pausing trading
Businesses with turnover falling more than 50%
Accommodation and food
Arts, entertainment and recreation
Average for all industries
NB – this table shows selected data from the analysis. For a full table covering all sectors, see the research note.
The analysis suggests that, without urgent action, the UK may be on the brink of a surge in youth unemployment.
Women workers aged 2 5 and under face the greatest risk of all. They are six times more likely than male workers over 25 to work in the highest risk sector, accommodation and food.
In addition to lay-offs, recessions make it harder for young people seeking to enter the labour market for the first time, as employers hire less. This part explains why youth unemployment tends to be much higher than for other workers following a recession.
UK job vacancies have already fallen 25% compared to this time last year. And the sector with the biggest fall is accommodation and food (42%).
Job guarantee scheme
Research shows that prolonged unemployment when young has negative impacts on later working life. This includes a greater likelihood of further periods of unemployment and work with lower pay.
The TUC is calling for a job guarantee scheme to stop those without work becoming long-term unemployed, with early access to the scheme for young workers.
It would resemble the future jobs fund, which was part of the national recovery plan following the recession in 2008 caused by the private banking crisis. A government evaluation found that, two years after starting the programme, participants were 27% more likely to be in unsubsidised work.
Key features of the TUC’s proposed jobs guarantee scheme:
Alongside the job guarantee scheme, the TUC says that government must work with businesses and unions to protect as many jobs as possible. This should include extending the job retention scheme for employers who cannot easily adapt to social distancing.
And ministers should form a national recovery council alongside unions and employers, to design and deliver a recovery plan that protects and creates decent jobs.
TUC General Secretary Frances O’Grady said:
"We know it's a tough road ahead. But the more people there are in work, the faster we can work our way out of recession.
“Our national recovery plan must be centred on jobs – both protecting those we have and creating more. We need more good jobs in social care, in the green tech that our future depends on, in UK start-ups and in a revitalised manufacturing sector.
“Some industries may need help for longer through the job retention scheme so they can retain staff while they adapt to new safety standards.
“And for those who lose their jobs, the government must set up a job guarantee scheme. Young people in particular can’t be left to the misery of long-term unemployment. And it’s the best value option for the treasury.
“Making sure everyone has a decent job on a fair wage is how to recover faster and build back better."
- Full TUC analysis: The full analysis on which this release is based can be found in the research note in the 'related content' section at the bottom of this page.
- Job Guarantees Report: The TUC report ‘A new plan for jobs - why we need a new jobs guarantee’ can be found here:
- Net benefits from the Future Jobs Fund (FJF): DWP’s evaluation of FJF in 2012 showed that overall, the programme was associated with net benefits to the employer (£6,850) and the participant (£4,000). The cost to the Exchequer per participant was £3,100, so the net benefit to society was £7,750 per participant. Two years after starting in the scheme, participants were 16% less likely to need welfare support, and 27% more likely to be in unsubsidised employment.
- Impact of coronavirus crisis on young workers: Analysis by the Institute for Fiscal Studies shows that employees under 25 are about two and a half times as likely as other workers to work in a sector that is currently shut down.
- Research on young workers and long-term unemployment: A study by the University of Bristol identified that prolonged periods of unemployment can negatively impact people’s experience of the labour market later on in life in the form of lower wages and higher unemployment rates. It shows that these impacts are especially significant for young people who experience long-term unemployment compared with people who experience it later on in life. https://www.bristol.ac.uk/media-library/sites/cmpo/migrated/documents/wp97.pdf
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