This recession stands out for its scale and speed, on both counts far outstripping the impact of the 2008 financial crisis that we thought would be the defining economic event of our lifetimes.
And this is a jobs recession. Jobless numbers never grew as expected during the financial crisis, but are certainly picking up now. Last week, worries about the economic impact of coronavirus became reality – almost one million claims have been made for universal credit in the past fortnight.
Job losses are spreading much faster than the virus. The spread of the first is helping impede the spread of the second, so while this surge might be unprecedented it should not be surprising. Government policy is to close down employment-heavy sectors such as hospitality, so it’s almost automatic that we see “by far the fastest downturn in service sector output” on record.
But while we know work is drying up, there is much we don’t know about who is being affected. The data we usually rely on doesn’t become available at the pace of the crisis, but there is some evidence. A timely survey conducted by academics in Britain and Switzerland showed that the young and low earners are hit hardest. Lower earners have been twice as likely to lose their jobs as high earners, while 12% of under-30s report being unemployed because of this crisis, against 6% of those aged 40-55.
Policymakers wishing to see us through this crisis need to recognise that we face a jobs catastrophe, but one that has arrived sooner for some than others.
• Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org
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