Zero-hours contracts reach record level as 730,000 jobs are lost

The falls in employment are greatest among the youngest and oldest workers, along with those in lower-skilled jobs.

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The UK has suffered its largest fall in employment in a decade, according to data from the Office for National Statistics. The three months to June saw the largest quarterly fall since May-July 2009 during the financial crisis – mainly due to a drop in self-employment.

An estimated 114,000 workers lost their jobs in July alone – with the number employed falling by 730,289 between March and July. The figures, based on real-time PAYE data, still don’t reflect how badly Covid-19 has ravaged living standards as furloughed workers are counted as employed.

When the Job Retention Scheme ends in October, the number of employed workers will plummet further still. Today’s data shows the number of people temporarily away from paid work – which includes those on furlough – reached 7.5million in June. Those most affected include the UK’s youngest and oldest workers and those in manual or elementary occupations.

The youngest and oldest workers were most likely to be temporarily away from paid work during the pandemic

Away from work rates for those in employment, April to June 2020
The youngest and oldest workers were most likely to be temporarily away from paid work during the pandemic
Source: ONS

One consequence of the furlough scheme is that hours worked have fallen dramatically. The total for all workers was down by 19.3 per cent on the same period last year – equivalent to 203million hours across the UK.

April to June saw the largest quarterly drop in hours worked since records began

UK total actual weekly hours worked (people aged 16 years and over), seasonally adjusted
April to June saw the largest quarterly decrease in hours worked since records began
Source: ONS

The number of zero-hours contracts hit the highest level on record in the three months to June, as employers looked to flexible working to offset the damage to business caused by the pandemic crisis. Some 1.05 million people were employed on a zero-hour basis – up from 974,000 in the three months to December 2019.

Zero-hours contracts have reached record levels as employers seek flexibility

People in employment on zero-hours contracts
Zero-hours contracts have reached record levels as employers seek flexibility
Source: ONS

One positive sign in the latest report is that the reopening of pubs and bars has meant the number of job vacancies in hospitality has started to rise again – crucial for a sector among the hardest hit by the virus.

Vacancies per 100 employee jobs doubled from 0.4 in accommodation and food services in April to June to 0.8 in May-July, with an overall rise of 125 per cent across the sector. Across all industries the number of vacancies rose 10 per cent from April-June to May-July.

The hospitality sector has seen vacancies bounce back in the last quarter

% change in vacancy level from April-June to May-July
The hospitality sector has seen vacanices bounce back in the last quarter
Source: ONS

The figures also show unemployment is largely unchanged at 3.9 per cent, or 1.34million, owing to an increase in the number of people out of work but not currently looking for work (those defined as “economically inactive”). 

Nye Cominetti, senior economist at the Resolution Foundation, said: “Job openings, although slightly recovered since hiring stalled during lockdown, remain at low levels in the hardest-hit industries, creating a worrying environment for any workers in companies that have recently announced significant redundancy plans. 

“The government needs to heed these early indicators and extend support to those sectors and workers that are going to be hit hardest by the economic fallout of this crisis.”

Jonathan Athow, ONS deputy national statistician for economic statistics, said: “The falls in employment are greatest among the youngest and oldest workers, along with those in lower-skilled jobs. Vacancies numbers began to recover in July, especially in small businesses and sectors such as hospitality, but demand for workers remains depressed.”

Michael Goodier is a data journalist at New Statesman media group

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