U.K. Furloughed Jobs Plunge by 1.2 Million as Economy Reopens
The number of British jobs supported by government wage subsidies plunged by almost 1.2 million in May, and a key survey suggests the decline continued apace last month.
The drop is a boost for Prime Minister Boris Johnson on the day the government begins to wind down its flagship furlough program, which has propped up almost 12 million jobs at various times at a cost to the public purse of about 66 billion pounds ($90 billion). Employers are now required to make a contribution to the wages of furloughed employees ahead of the program ending altogether on Sept. 30.
The number of jobs covered by the Coronavirus Job Retention Scheme stood at 2.36 million on May 31, compared with 3.54 million at the end of April, HMRC, the U.K. tax authority, said Thursday. For the first time, fewer women than men were furloughed, reflecting the reopening of stores, restaurants, bars and hotels since April.
Separate figures from the Office for National Statistics showed the proportion of the business workforce on furlough fell to 6% in early June. Given the margin for error, that suggests about 1.3 million to 1.9 million people were on wage support, the ONS said. Under the CJRS, furloughed workers receive 80% of their pre-pandemic pay, a cost that will increasingly be borne by employers over the next three months.
“Our Plan for Jobs has supported people’s jobs and livelihoods throughout the pandemic and it’s fantastic to see so many people coming off furlough and into their workplaces with our restaurants, pubs and shops reopened,” Chancellor Rishi Sunak said in a statement released by the Treasury.
However, the data contained some troubling signs. Fully furloughed jobs -- where no work is being done -- still accounted for more than half the total. The worry is that employers will decide to axe roles bringing in little or no income as government support is withdrawn.
Moreover, furloughing is coming down more quickly among young workers than their older peers. More than 40% of furloughed jobs at the end of May were held by people age 45 and over.
“Today’s figures offer a sobering reminder of just how incomplete our Covid recovery is,” said Daniel Tomlinson, senior economist at the Resolution Foundation research group. “The government must do all it can to prevent a big rise in unemployment this Autumn -– particularly for those who have spent long periods not working during the pandemic.”
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