// As many as 11.7m people across all sectors could be furloughed or unemployed over the next 3 months
// Employees in hospitality & retail sectors are most likely, 50% more than average, to be affected
// The government’s Coronavirus Job Retention Scheme launches today
Retail has been identified as one of the two most at-risk sectors that would be affected by a surge in unemployment or furloughed staff in the coming months, a report has suggested.
As many as 11.7 million people across all sectors could be furloughed or unemployed over the next three months, according to a paper from an independent think tank Resolution Foundation.
The report said employees in the lowest-paying hospitality and retail sectors are most likely, 50 per cent more than average, to be affected.
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Analysing the differing impact of the Covid-19 crisis within the labour market, the report states: “As many as 3.1 million employees (46 per cent) in these sectors could be furloughed, with an additional 800,000 workers in this part of the economy becoming unemployed.
“In contrast, only four per cent of those working in the highest-paid sector, finance and insurance, are likely to be furloughed.”
It comes as the government’s Coronavirus Job Retention Scheme (JRS) launched today.
The report entitled Launching An Economic Lifeboat: The Impact Of The Job Retention Scheme warned of the possible extent of joblessness, but pointed to the mitigation impact of the scheme.
“Although we estimate that non-working could increase by as much as 11.7 million in Q2 2020, this is heavily tilted towards use of the JRS (8.3 million employees),” it said.
“Unemployment could still rise sharply to 3.4 million (10 per cent) in Q2 2020, but because of the JRS it will not reach catastrophic levels.”
It added that the JRS “may well have the largest fiscal cost of any intervention”, adding the government needed to provide “regular updates on scheme take-up” and there was a “strong case for extending the scheme to cover shorter hours working”.
Resolution Foundation economist Daniel Tomlinson said: “The government’s welcome Job Retention Scheme is what stands between Britain experiencing high unemployment over the coming months, and catastrophic depression-era levels of long-term joblessness.
“It is proving particularly essential in big, low-paying sectors like hospitality and retail, where around half the workforce are no longer working.
“The priority from today is for the government to process claims as quickly as possible so that the millions of firms relying on it get the financial support they need.
“Given the scheme’s central role in both providing a safety net and restarting economic activity, the government should provide regular updates on take-up and payments, and extend it to allow shorter-hours working.”
with PA Wires