Employment and income

The economic impact of COVID-19 is likely to dwarf anything in living memory, a decline in GDP of 20.4% during Quarter 2 (April to June) 2020 was at the time the largest since 1955. UK governments introduced a range of policies to mitigate the impact of this huge drop in productivity on individuals’ incomes. In July 2020 a total of 9.5 million jobs were furloughed and 2.7 million self-employed people claimed grants, alongside a sharp increase in Universal Credit claims at the beginning of the coronavirus pandemic.


Young people, particularly those from deprived backgrounds, have had their earnings and job prospects hit hardest. BBC Panorama found people aged 16-25 were more than twice as likely as older workers to have lost their job, while six in 10 saw their earnings fall.

There are many gaps in financial support. Self-employed people earning above £50,000, employees who began work in March, some freelancers, and many others with complex situations receive no support. Those with savings above £16,000 or no recourse to public funds are not entitled to Universal Credit. Some may have savings or other income, but the financial impact of the sharp economic downturn will not be experienced equally. A £500 payment is available to people on Universal Credit who are told they have to self-isolate, but other low income workers are not eligible for this payment. This may contribute to low compliance with self-isolation and hamper efforts to curb the virus.


COVID-related deaths are very unequally distributed, with men in manual and caring jobs dying at nearly four times the rate of those in managerial and professional jobs.

Healthcare workers were seven times as likely to have severe COVID-19 infection as those with other types of ‘non-essential’ jobs, while people working in the social care and transport sectors were twice as likely. Black, Asian and ethnic minority groups are also over-represented in COVID-19 deaths and this is also, in part, related to the labour market. Structural racism is evident in the numbers of people from ethnic minorities working in the most risky environments as key workers, and the higher numbers working in the “gig economy”.

Many people on furlough will likely lose their jobs when the scheme ends. These will be concentrated in sectors dominated by lower income jobs such as retail, catering, and transport. Given the concentration of young people working in these sectors, they too will be another group bearing the brunt of the economic impacts of COVID-19.

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