Young people and women bear brunt of economic shut-down
THE coronavirus lockdown is costing the economy £2.4billion every day, a survey by the Centre for Economics and Business Research has revealed.
The study found that the UK’S economic output has fallen by 31.3 per cent since the Government introduced draconian social distancing measures.
The manufacturing sector is seeing the highest fall in output in absolute terms, as many workers producing goods cannot work and demand for non-essential goods is slashed as a result of the worldwide pandemic.
This is estimated to be costing the economy over £500 million per day, with production in the sector down 69 per cent.
Douglas Mcwilliams, of the CEBR, said the results showed many of the Government’s measures to prop up the economy were doing little to help sectors such as manufacturing.
He said: “Chancellor Rishi Sunak will need to look again at how to help this sector to prevent fundamentally viable firms from going under.”
Meanwhile, the Institute for Fiscal Studies found that young workers and women have been the hardest hit by the lockdown as their employers are more likely to have shut down.
Young people aged under 25 are two and a half times more likely than other employees to have jobs in businesses that have been forced to close, including restaurants, retail and the leisure industry. Women, who in the past five years have been a major driver of rising employment, are also harder hit than male workers because they are more likely to work in shops, leisure and the food industry. Women were a third more likely to have been hit by the lockdown than men, with one in six (17 per cent) employed in a “shut-down” sector against one in seven (13 per cent) men.
The research shows higher earners are less likely to be working in shutdown businesses, suggesting the lockdown could increase social and financial inequality. Low earners were seven times as likely as high earners to be working in a now shut-down sector.
Dr Xiaowei Xu, senior research economist at IFS and joint author of the research, said: “There is a remarkable concentration of younger and lower paid workers in the sectors most affected by the current lockdown.
“Women are also more likely to be affected than men. Fortunately, in the short run, many will have the cushion of the incomes of parents or other household members. But for the longer term there must be serious worries about the effect of this crisis on the young.”
Restaurants, retail and leisure accounted for nearly a third (30 per cent) of all employees under the age of 25, with young women affected most.
Dr Xu said the findings chimed with evidence that younger workers and low earners were more likely to have lost their jobs or seen their earnings fall by the end of March.
One in 10 workers under 30 had lost their jobs by the end of March “definitely” or “probably” because of the coronavirus pandemic, compared to 6 per cent of workers aged 40 to 55, the survey also showed.