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Coronavirus: Workers under-25 and women financially worst hit by pandemic

Kalila Sangster
·3-min read
Waitress serving customer over the counter at a coffee shop
Young workers, the lowest earners and women will be financially worst hit by the coronavirus lockdown, as they are more likely to work in shutdown sectors such as hospitality and retail. (Getty)

Young workers, the lowest earners and women will be most affected economically by the coronavirus lockdown, according to a new study.

The study by the Institute for Fiscal Studies (IFS) found that a “remarkable concentration” of workers under 25, those earning the lowest wages, and women are employed in sectors that have shut down due to the coronavirus pandemic.

Younger workers are likely to be hit the hardest, as they are nearly two-and-a-half times more likely to work in a shutdown area, with 30% of workers under the age of 25 employed in those sectors, compared with 13% of those aged 25 and over.

IFS director Paul Johnson told the BBC Today programme that young people aged 25-years-old and under working in the leisure, retail and hospitality sectors, have been heavily impacted by the coronavirus lockdown.

“There are those young people who are in those jobs at the moment or were in those jobs before COVID[-19] hit, and if they're not able to get back into work then there may be longer term consequences for them,” he said.

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“We know that periods of unemployment when you're young can have long-term effects,” he said.

Younger people coming into the labour market after finishing school or university are making their entry “in probably the most difficult time in living memory,” Johnson said.

“Traditionally you're going to be looking to start work in September, [but] now couldn't be a worse moment to be doing it.”

The coronavirus is also likely to have a bigger financial effect on women because of a disproportionate number of women working in areas severely affected by the lockdown, such as leisure, retail and hospitality, with 17% of female employees employed in shutdown sectors compared with 13% of men.

Workers in low paying jobs were particularly hard hit by the coronavirus, the IFS said, with 34% of employees in the bottom tenth of the earnings distribution working in areas directly impacted by the lockdown, compared with just 5% of those in the top tenth.

Last week business groups sounded the alarm on jobs, warning that huge swathes of the population could be laid off or furloughed in the coming weeks due to the coronavirus pandemic.

Both the Chartered Institute of Personnel and Development (CIPD) and British Chamber of Commerce (BCC) found many businesses plan to use the government’s Job Retention Scheme, which allows employers to furlough staff and have the state pay 80% of their wages.

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CIPD said 52% of businesses surveyed planned to use the furlough scheme. The BCC’s survey of 600 businesses found 44% were planning to furlough at least 50% of staff in the next week.

Nearly a million people applied for universal credit benefit in the last two weeks of March, suggesting redundancies have already begun en masse.