Unemployment is expected to have risen by at least 2.5 million, which is the fastest rise compared to the previous three recessions.
This is according to the Institute for Employment Studies (IES) research, which found that unemployment is believed to have risen from 3.9 per cent to around 7.5 per cent of the workforce.
The IES states there is evidence that a prolonged stint of unemployment, will have a more damaging effect on younger employees and their individual future earning, as well as being detrimental to employment prospects and health and wellbeing.
Women, young people and the lowest-paid are the groups that are the most vulnerable during a recession.
The IES said:
If we can leave the ‘lockdown’ smoothly by late spring, then there seems a reasonable chance that unemployment will peak quite quickly, and more or less where it reached after the 2008/9 recession. However if the lockdown continues into the summer, then it is plausible that viable businesses will start to run out of cash reserves and loan options and we will see a ‘second wave’ of large scale job losses.
Tony Wilson, institute director of the IES said:
We recommend that government brings together a ‘Cobra’ for jobs, to work together on designing, co-ordinating and mobilising this response, and convening a wide range of partners including government Departments and agencies, local government, sector bodies, trusts and foundations and key stakeholders.
The proposals will help to ensure that as the economy recovers we can keep people attached to work, help them find better work, and minimise the ‘scars’ from being out of work.
With a cost of around £4.7 billion over the next three years, the evidence from previous programmes tells us that this investment would more than pay for itself in the future; while the evidence from previous recessions tells us that the costs of inaction would be far higher.
The IES proposes a five-step plan to help people get back to work, they are:
- Investment in new active labour programmes for those out of work
- Refocusing skills and training to support the recovery
- An integrated and coherent offer for young people
- An orderly withdrawal from the Job Retention Scheme
- A new partnership-based ‘Back to Work’ campaign