Younger workers have borne the brunt of job losses during the Covid crisis, official figures show as unemployment continues to rise.
UK unemployment rose to 5.1% in the three months to December, said the Office for National Statistics, the highest in nearly five years.
The figures show that 726,000 fewer people are currently in paid employment than before the start of the pandemic.
Nearly three-fifths of this fall, 425,000, were younger than 25 years.
ONS said 1.74 million people were unemployed in the period October to December, an increase of 454,000 from the same quarter in 2019.
However, the British Bureau of Statistics said there were some “preliminary early signs” that the labor market was stabilizing. There was a slight increase in the number of employees paid through payroll in the last few months.
In January 2021, 83,000 more were in paid employment compared to the previous month.
Average salary including bonuses increased by 4.7% in the three months to December from the previous year. But statisticians said this was due in part to the disproportionate decline in the number of young, typically lower-paid workers. Adjusted for this, the ONS said that underlying wage growth was likely to be below 3%.
“Our study shows that unemployment has had the largest annual increase since the financial crisis,” said Jonathan Athow, ONS deputy national statistician for economic statistics.
“However, the proportion of people who are neither working nor looking for work has stabilized after rising sharply at the start of the pandemic, as many people who lost their jobs early now began to look for work.”
Despite this, Mr Athow told the BBC’s Today program that the true underlying picture was not yet clear due to the large number of people still in the furrow.
He said figures from early February suggested that around six million people were currently being merged, adding: “There is a huge uncertainty about what will diminish them when the scheme ends.”
The Bank of England predicts that unemployment will rise sharply and with an estimated high of 7.8% later in the year.
Today’s labor market figures show that wages rose by an average of almost 5% compared to a year ago – a much larger wage increase than has been typical most of the last decade.
If you are an employee, you may not be able to recognize this number as anywhere near your own pay rise; a large part of it is because it is an average figure.
If you remove nearly 730,000 workers from employers’ payrolls, many of whom have been in low-wage occupations such as accommodation and food services – where pay rises have been modest or non-existent – it flatters the average.
Although these “compositional effects” are allowed, the National Statistics Office estimates that wage growth was still 3% overall – far more than 0.7% inflation.
And in some sectors, it was better than that: according to the ONS, wages in health and social work rose by an average of 6.2% – some modest compensation perh for the risks taken by workers.
Chancellor Rishi Sunak is preparing for next week’s budget, which is expected to draw up further plans to help the labor market.
“I know how incredibly hard the past year has been for everyone, and any job lost is a personal tragedy,” Sunak said.
“By next week’s budget, I will outline the next phase of our job plan and the support we provide through the rest of the pandemic and our recovery.”
Labor shadow chancellor Anneliese Dodds claimed that some companies “threw in the towel” because the government took too long to confirm what business support would be available to them over the next six months.
Ms Dodds criticized the government for announcing its path to ending the shutdown “without the clarity of business support”. She told the BBC ministers “can enjoy the budget theater” but it was “wrong to postpone decisions until the budget” as some companies had decided to “give up”.
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