Poor and disadvantaged workers more likely to lose hours due to Covid, study finds

Workers who are young, black, low-paid or with lower levels of qualifications have been especially hard hit.

2 Sep 2020| News

Research from the London School of Economics (LSE) has found that people in low paid work or in disadvantaged groups are more likely to have lost hours at work during the pandemic.

Those on less than £151 per week were three times more likely (53.7%) to have been furloughed or had their hours at least halved than people on £600 per week (18%).

Young people aged 18-24 were 18% more likely than those aged 35-54 to have experienced these detriments, individuals with GCSE or equivalent qualifications were 17.1% more likely than those with degrees, and black workers – already seeing disproportionately negative health outcomes from the pandemic – were 42.3% more likely than the average worker to lose out.

Using hours worked to calculate a “realistic” employment rate that takes into account those working no hours as well as joblessness, the authors said employment decreased by more than 15 percentage points between February 2020 and June 2020.

Professor Stephen Machin, co-author of the report, said the “economic scars” left by the Covid-19 crisis could “cut even deeper”, and that recovery could be “even slower”, than in previous recessions.

Wages, the authors pointed out, had only just returned to pre-financial crisis levels before the pandemic struck.

“The effects on those leaving full-time education could be more pronounced due to school closures and shifts to online learning in universities,” Professor Machin explained.

“Long-lasting changes to the way we shop, travel and socialise are likely to significantly affect certain sectors.”

Mihai Codreanu, who also worked on the report, added: “Understanding what we can and cannot learn from previous recessions is important for the current downturn – there are some similarities, but also some marked distinctions.

“The starkest difference is the occurrence of a discrete, immediate lockdown of some sectors. Effects in these sectors are likely to be long-lasting despite government support because it is implausible that consumer demand will return to normal in the foreseeable future.”

Co-author, Professor Brian Bell, concluded: “Well-designed labour market policies need to be implemented to protect those most at risk and to prevent further damage to affected individuals, their families, communities and to the UK economy.”