U.K. Lockdown Hits Young, Low-Paid and Women Most, Study Finds
(Bloomberg) -- The U.K.’s lockdown to curb the coronavirus is having the biggest impact on the young, low-paid and female workers, according to new research that suggests inequality is widening during the pandemic.
People under 25 were more than twice as likely as other employees to work in shops, restaurants, hotels, and arts and leisure services -- sectors that have effectively shut down since the U.K. ordered people to stay indoors, according to the Institute for Fiscal Studies.
On the eve of the crisis, women were about a third more likely than men to work in an area that is now shut down, the group said. Because women and those on low pay are far more likely to work in such sectors, Covid-19 will have a bigger effect on their earnings, the IFS said.
“There is a remarkable concentration of younger and lower-paid workers in the sectors most affected by the current lockdown,” said Xiaowei Xu, a senior research economist at IFS. “For the longer term there must be serious worries about the effect of this crisis on the young especially and on inequality more generally.”
The U.K. has been racing to protect businesses and workers from the effects of the pandemic and the restrictions imposed to combat it. Finance minister Rishi Sunak said he’d do “whatever it takes” to prop up jobs and has pledged more than 60 billion pounds ($74 billion) of direct aid and loan guarantees totaling hundreds of billions of pounds.
Bloomberg Economics has estimated the shutdown could cost Britain 700,000 jobs. That would take the unemployment rate to 6% -- the highest for six years.
The coronavirus crisis has transformed the fiscal landscape at a stroke. Britain was on course for a budget deficit of 55 billion pounds in the year starting April. Now, according to the IFS, borrowing could be as much as 200 billion pounds as an economy on course to shrink at least 5% this year hammers tax revenue and drives up spending on welfare.
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