Unemployment “remains low” despite grim headlines, says IEA expert
26 January 2021
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Responding to the latest unemployment figures published by the Office for National Statistics (ONS), Julian Jessop, Economics Fellow at the free market think tank the Institute of Economic Affairs, said:
“Looking past the grim headlines, the latest labour market data are actually reassuring. The detail suggests that unemployment levelled out in November itself, while the economy may have added jobs in December. This provides further evidence that the hit from the second national lockdown was smaller than expected.
“Unemployment also remains low in the UK compared to the rest of Europe and is still only half where some feared it might be. This is a tribute both to the success of government policies to protect jobs and the relative flexibility of the UK economy.
“The burden of job losses is still mainly falling on young people. However, this is largely because they are more likely to work in the sectors which have suffered the most from Covid restrictions, notably hospitality. As and when the lockdown is lifted, they will hopefully be reemployed relatively quickly too, without the need for the government to do more.
“In the meantime, there is a good case for extending the furlough scheme a little longer and providing additional support to sectors like hospitality, at least while the Covid restrictions are in place. But beyond that, government subsidies could simply distort incentives and hold back the recovery.”
ENDS
For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or ecarver@iea.org.uk.
IEA spokespeople are available for further comment and interview.
To read IEA report ‘How to create new jobs’, click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“Looking past the grim headlines, the latest labour market data are actually reassuring. The detail suggests that unemployment levelled out in November itself, while the economy may have added jobs in December. This provides further evidence that the hit from the second national lockdown was smaller than expected.
“Unemployment also remains low in the UK compared to the rest of Europe and is still only half where some feared it might be. This is a tribute both to the success of government policies to protect jobs and the relative flexibility of the UK economy.
“The burden of job losses is still mainly falling on young people. However, this is largely because they are more likely to work in the sectors which have suffered the most from Covid restrictions, notably hospitality. As and when the lockdown is lifted, they will hopefully be reemployed relatively quickly too, without the need for the government to do more.
“In the meantime, there is a good case for extending the furlough scheme a little longer and providing additional support to sectors like hospitality, at least while the Covid restrictions are in place. But beyond that, government subsidies could simply distort incentives and hold back the recovery.”
ENDS
Notes to editors
For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or ecarver@iea.org.uk.
IEA spokespeople are available for further comment and interview.
To read IEA report ‘How to create new jobs’, click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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