U.K.’s 2.1 Million Hidden ‘Jobs Gap’ Looms Over the Recovery

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About 2.1 million U.K. jobs are still affected by the coronavirus pandemic, pointing to a bumpy economic recovery, a think tank claimed.

In a report published Thursday, the Institute for Public Policy Research warned of a hidden “jobs gap” -- positions that remain furloughed or lost -- as the government prepares to end its flagship wage support program at the end of the month.   

Although many furloughed workers will return to their jobs, a large number are at risk of becoming unemployed, particularly low-paid staff in the hospitality and services industries where demand is still below normal, it said.

“While there is some positive news about the labor market, we still have a long way to go before we reach full employment,” said IPPR Senior Economist Carsten Jung.

Around 1.9 million Britons remained on furlough over the summer and there were 200,000 fewer employees on payroll compared with pre-pandemic levels, the IPPR said, citing tax authority data. Jobs lost or furloughed are in excess of vacancies in almost all sectors.

The number of people working-age people neither in employment nor looking for a job is also 412,000 higher than before the crisis, and some of them may want to return to the labor market.  

The report calls for an extension of government support beyond Sept. 30 and a 10% subsidy for part-time hourly wages, among other things. 

“We should keep and tweak the furlough scheme until the labor market has genuinely recovered, rather than put the lowest earners at an unnecessary risk,” Jung said.

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