Record 1.6m face long-term unemployment next year

A JOBS disaster could be on the way as long-term unemployment is set to hit a record 1.6m next year, if the second wave of Covid crushes the recovery.

The youngest and oldest workers are at particular risk of falling out of work for 12 months or more, potentially for many years to come, the Learning and Work Institute has warned.

More than 1m could still be in this category by the middle of the decade, with dire implications for families and the wider economy.

“It scars individuals, families, and communities for years to come. It lessens the chances of finding work and significantly reduces income in future years,” said the think tank.

“It demotivates people, undermines their skills, and can lead to health problems, especially mental health.”

This would be a problem not seen at this scale for decades.

Long-term unemployment fell to below 300,000 earlier this year, or less than 1pc of the workforce – a record low.

Rising to 1.6m would push it up to almost one worker in 20, a record high on Office for National Statistics data going back to the early Nineties. It is a stark turnaround from the jobs miracle of recent years. At the start of the year, Britain’s unemployment rate was down at l evels not seen since the midSeventies, but could now face severe and lasting unemployment of the type suffered in the worst parts of the Eighties and Nineties.

Even in the aftermath of the financial crisis, long-term unemployment never reached the 1m-mark.

If the pattern of previous recessions is repeated, the Learning and Work Institute expects workers in the manufacturing, construction, retail and wholesale i ndustries to be worst affected, with lower-skilled staff most vulnerable.

By region, those in London, Merseyside, South Yorkshire and the West Midlands are most at risk.

The youngest workers are typically vulnerable because they have little or no experience of work, and can end up locked out of starting their careers for years. Up to 290,000 under-25s could end up long-term unemployed.

Workers aged over 65 are more vulnerable to the coronavirus, and have so far proven vulnerable to job losses.