Low-paid workers at biggest risk of losing jobs at 'furlough cliff edge'

Low-paid workers face the biggest risk of losing their jobs when the coronavirus furlough scheme ends, experts warn today.

Staff earning the least have been “worst affected by the pandemic”, according to the Resolution Foundation think-tank.

They include those in the pub, restaurant and cafe trades, as well as retail workers in non-essential shops, whose businesses were shut for months.

While they “are now returning to work fastest in the recovery” they “still face the dual risks of rising unemployment and high job insecurity later this year and beyond”, the Foundation fears.

The alert comes as it publishes its 11th annual Low Pay Britain report, which examines the impact of the crisis on low-paid workers and their prospects during the reopening of the economy and the post-pandemic labour market.

Chancellor Rishi Sunak will wind up the furlough scheme in the autumn
Chancellor Rishi Sunak will wind up the furlough scheme in the autumn

In March, the lowest paid fifth of workers were three times as likely to have suffered a “major labour market hit” – defined as losing their job, being furloughed or facing a cut to hours and pay – as the highest paid fifth of workers.

The Foundation says “big risks lie ahead in the wake of the crisis”, with unemployment expected to rise when furlough finishes in September.

“With high concentrations of low-paid workers still on furlough, and history showing that they are worst affected even in normal recessions, the report warns that low-paid workers face the highest risk of losing their jobs later this year,” say analysts.

Senior economist Nye Cominetti said: “Low-paid workers have been at the heart of the economic crisis.

“In the run-up to the reopening of the economy, one-in-five workers had either lost their jobs, been put on furlough, or taken a major pay hit.

“Fortunately, low-paid workers also look set to be at the heart of the recovery by coming off furlough in huge numbers and returning to their previous jobs. However, big risks still lie ahead.

“Low-paid workers are most at risk from the expected rise in unemployment later this year, which also risks causing greater job insecurity.”

GMB union general secretary Gary Smith said: “The pandemic has exposed the deep inequalities in the UK economy after a decade of politically driven austerity.

“A furlough cliff-edge will also exacerbate pay inequality, increase unemployment, and damage the credibility of the Government’s ‘levelling-up’ agenda – killing off a recovery before the country gets back on its feet.”


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