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Low-paid UK workers ‘most at risk of losing jobs when furlough ends’

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. (Reuters photo)

Low-paid workers in the United Kingdom already hardest hit by the Covid-19 pandemic face the highest risk of losing their jobs later this year, a thinktank says.

They will be most at risk from expected rises in unemployment and job insecurity when the government’s furlough scheme ends in September, the Resolution Foundation said on Monday.

Millions of job losses have been prevented likely because of the government’s coronavirus job retention scheme, which pays 80% of furloughed workers’ wages, but economists are worried that some jobs will still not be viable when the scheme ends on 30 September.

The projected rise in unemployment is likely to affect such workers hardest, in line with the experience of the financial crisis over a decade ago, noted the thinktank, which studies living standards.

It said that by March workers ranked in the bottom fifth for pay were three times more liable to have lost their job, been furloughed or lost income when compared with the top fifth.

Twenty-one percent of lower-paid workers had lost out in comparison to only 7% of the highest paid, it added.

Retail, hospitality and leisure are the UK’s biggest low-pay sectors and they accounted for the majority of workers returning to work in April.

Nye Cominetti, senior economist at the Resolution Foundation, said, “Low-paid workers have been at the heart of the economic crisis. Fortunately, low-paid workers also look set to be at the heart of the recovery by coming off furlough in huge numbers and returning to their previous jobs.

"However, big risks still lie ahead. Low-paid workers are most at risk from the expected rise in unemployment later this year, which also risks causing greater job insecurity," said Nye Cominetti, senior economist at the Resolution Foundation.”

"The government can salute the vital contribution of Britain's low-paid workers by offering them a new post-pandemic settlement – from better pay via a higher National Living Wage to greater security of working hours, and proper enforcement to tackle labour market abuses," Cominetti added.

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