The worst of the jobs crisis is yet to come, with experts warning of “dark days” ahead for the UK labour market.
Unemployment hit an 11-year high in three months to November 2008 with 1.92 million people now out of work. However, the official figures published yesterday (21 January) do not include the tens of thousands of jobs cut since November. In that period there have been 225,000 redundancies announced – the highest level since records began in 1995.
Nigel Meager, director of the Institute for Employment Studies, said employment was now contracting sharply along with the economy, and the months ahead looked bleak, particularly for new entrants into the labour market.
“Recently laid-off workers are likely to enjoy an advantage in the competition for the shrinking number of job vacancies, and young people coming out of education and training will struggle to get the jobs they had hoped for,” he said.
Chief economist at the Chartered Institute of Personnel and Development John Philpott said that, for the first time, every sector of the economy had registered a fall in vacancies.
“We are entering the dark days and should be prepared for a depressing period when – as in the 1980s and 1990s recessions – the benefit claimant count will rise by more than 100,000 each month,” he added.
“Even on the most optimistic of scenarios, around one in 10 people will be unemployed by the time the jobs recovery begins,” he added.
Despite the gloomy outlook, there are still more than 29 million people in work, a sign that employers are adjusting by cutting hours or pay rather than shedding jobs altogether. The number of people in part-time work has also risen.
The Work Foundation called on the government to introduce a short-time working programme that would enable employers to cut hours with the state stepping in to make up employees’ lost wages.