Britain’s Jobless Left Scarred by Lengthening Covid Lockdowns

The chances Britain’s unemployed have of returning to work diminish the longer they’re out out of a job.

Those findings by the government’s Office for National Statistics confirm the concerns of economists about the potential for scarring on the workforce with each addition to coronavirus lockdown restrictions.

Between 2007 and 2020, 41% of people who had been out of work for up to three months returned to work within the next three months. By contrast, only 23% of those unemployed for six to nine months got back into a job.

Britain’s Jobless Left Scarred by Lengthening Covid Lockdowns

Unemployment scarring -- the impact a period out of work can have on future career prospects and earnings -- is one of the key risks hanging over the economy after the pandemic fades and restrictions are gradually eased.

Prime Minister Boris Johnson’s government imposed a third national lockdown in January, loosening the rules at the beginning of this month to allow schools to return. Under the best case scenario, restrictions will continue until the end of June, with shops and restaurants shut until the middle of April.

The issue is particularly worrying because young people and those on low wages have been hit hardest by lockdowns over the past year. Government support programs have averted mass job cuts, though some of the 4.7 million people currently furloughed will inevitably be let go when subsidies are withdrawn later this year.

The Resolution Foundation warned last month that about 2 million people had been unemployed or on furlough for the past six months, a length of time that leaves them at higher risk.

“People less likely to find a job following time out of work could be at higher risk of being left behind as the labor market recovers from the effects of the coronavirus pandemic,” the ONS said.

Disabled people found it difficult to return to employment after a stint out of the work, the study found.

Age, being from a Black, Asian, or Chinese or other ethnic minority background was also found to significantly reduce a person’s likelihood of returning to work, compared with people of white ethnicity.

©2021 Bloomberg L.P.

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