Why it’s uphill work to find a post-Covid-19 job – Bill Jamieson

Out of the jumble of this week’s job statistics, here are two ominous and undeniable trends. The first is a growing number of “missing in action”, or more appropriately, “missing in inaction” – those with no paid employment but not registered as unemployed. Numbers here are already reckoned at one million.

Graduates from Edinburgh University celebrate after a ceremony at the McEwan Hall in the centre of Edinburgh

The second is more latent, but set to grow strongly: the swelling ranks of “In-Betweeners” – those desperately searching for new jobs and careers as the underlying economy undergoes its biggest transition for decades.

Jobs we thought to be secure – the 20-year boom, for example, in high street retail and associated supply chain work – is experiencing a dramatic shake-out that is literally changing the face of our high streets and town centres. Boots, Burberry, WH Smith and Marks & Spencer have already announced painful redundancies. More follow with almost every week. The notion of recovery here to status quo ante is little more than a phantasm.

Add to this gruesome list the number of job losses and closures in banking, airlines and travel, hospitality and dining, fast food outlets, specialist fashionwear, furniture and office services and supplies and the toll of private sector employment shedding has already hit 190,000 and rising.

Amid this carnage, the In-Betweeners – those in desperate transition – will soon become a new official employment category in Office for National Statistics data sets. A strange new staging post in post-Covid Britain will become a familiar landmark.

Thus it is not the statistical abstract of Gross Domestic Product that gives the full account of our economic state but the various measures of employment. Here we need to delve beneath the headline numbers to arrive at a truth that can be the opposite of the “at-a-glance” summary.

For example, according to the latest figures, the official unemployment rate across the UK marked time at 3.9 per cent – barely changed on last year’s reading. And in the three months to June, a period in which announcements of job cuts rained down from retailers to engineers, airlines to restaurant chains, unemployment on the ONS number actually fell by 10,000 to 1.34 million compared with the immediate previous three months.

And in June alone, the ONS shows employment hitting a record high of 76.8 per cent while unemployment dropped to 3.8per cent. Jobs crisis? What jobs crisis?

Figures for Scotland also show a modest drop in employment, down just 15,000 to 2.65 million between April and June, though our employment rate at 74.3 per cent is notably lower than that for England ( 76.9 per cent). And our unemployment rate at 4.5 per cent is higher than in England (4 per cent) while economic inactivity here is 22.2 per cent compared with 19.9 per cent south of the Border.

Delve further into the UK data and a fuller picture emerges. On HMRC figures, numbers on company payrolls have tumbled by 730,000 across the UK. But even this is not the complete picture. We have some five million self-employed who do not show up on payroll data. Official labour market figures show the number of self-employed fell by 238,000 between the first and second quarters. Adding these two together takes us to almost one million jobs lost in the pandemic – a missing million absent from the ONS unemployment tally.

Then there are the “economically inactive” up by 301,000 between the two quarters to 8.4 million. Of this total, some 383,000 are thought to have given up looking for work. Another 417,000 are technically employed but not being paid. A further 230,000 are self-employed but cannot claim any support. John Philpott of the Jobs Economist consultancy says adding these to the headline unemployment number “and the overall jobless total by mid-year is not far short of 2.5 million”.

As for the furlough scheme, it may yet deliver a nasty sting in the tail: the longer workers have stayed on furlough for three months or more the greater the risk that they have lost skills or that their jobs may have disappeared: it may well prove a recruiting sergeant for the new category of In-Betweeners.

Re-training, upskilling, digital education: these are set to become the new normal in an economy changing before our eyes: all this in the hope that new decently paid jobs with prospects will emerge from the current chaos.

One item of encouraging news here is that the latest Royal Bank of Scotland purchasing managers index (PMI) released this week finds that the coronavirus-related downturn “eased noticeably” last month. Business confidence strengthened to a five-month high despite firms reporting a reduction in new business in July.

It also found the softest fall in private sector output since March. We need to see more – much more – of this.