The jobs crisis is the biggest economic challenge of our future

Editorial: It would be a tragedy if Rishi Sunak missed the opportunity to build on the success of the furlough scheme

Around 695,000 workers have been removed from company payrolls since March (PA)

After the 2008 global financial meltdown, predictions of a prolonged unemployment crisis in the UK failed to materialise. In the eyes of economists, workers priced themselves back into jobs, showing the strength of the country’s much trumpeted, flexible labour market.

However, after a decade of austerity and wage restraint, it might be much harder to repeat the process after the severe economic shock delivered by the coronavirus pandemic. After the last crisis, many of the new jobs were in hospitality; that is not going to happen this time.

The latest employment statistics, published yesterday, showed that around 695,000 workers have been removed from company payrolls since March. The claimant count, which includes those in low-paid work as well as the jobless, rose to 2.7 million in August 2020, up 121 per cent since March. Worryingly, the Office for National Statistics confirmed that young people are most at risk; the number of under-25s in work falling by 156,000 between May and July. Although the government has announced a £2bn kickstart scheme to encourage companies to recruit young workers, it may struggle to hit its target to create 300,000 jobs.