Ross Clark

The looming Covid unemployment catastrophe

The looming Covid unemployment catastrophe
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Just how widely is the economic pain from Covid-19 being felt? Still surprisingly little, according to the latest employment figures from the Office of National Statistics (ONS). The absence of an explosion in unemployment goes some way to explaining why the lockdowns and restrictions have been accepted so meekly by the population at large.

That said, unemployment is beginning to rise significantly now. There are now 819,000 fewer payroll employees compared with the start of the crisis in February. The employment rate stands at 75.2 per cent, 0.9 per cent down on a year ago, and the unemployment rate is 4.9 per cent, up 1.2 per cent. Still, this is pretty low by historic standards: unemployment peaked at eight per cent in 2011, following the 2008/09 recession, at ten per cent in 1993 and at 12 per cent in the early 1980s. Considering that the economy has shrunk by eight per cent this year, blowing previous recessions out of the water, employment has held up extraordinarily well – albeit at the cost of record government borrowing.

Pay, too, is remarkably strong. Payrolled employees who have managed to stay in work have seen median monthly earnings rise 4.6 per cent over the past 12 months, well ahead of inflation (the government’s preferred measure, CPIH, currently stands at 0.9 per cent). It is not a case of high earners benefitting at the expense of the poor: the highest rise in median pay was at the 10th percentile level (5.7 per cent) and lowest at the 75th percentile (3.3 per cent). This is an extraordinary change from the stagnation in real pay of much of the last decade – all the more odd given it has happened during the deepest recession in modern times. Employees in the finance sector have been doing especially well, with median earnings up 6.5 per cent – so much for predictions that Brexit would hollow-out the sector. Unsurprisingly, it is a different story in the accommodation and food industries, where median pay is down 4.1 per cent.

Today’s figures confirm how public sector employees have been able to sail through the crisis: public sector employment was up 2.6 per cent in the year to September, while it is down 1.5 per cent in the private sector. No wonder there has been so little resistance in some quarters to lockdowns, even though they have devastated other industries.

The ONS this morning also published its weekly figures for deaths in England and Wales. There were 12,303 deaths in the week to 4 December, a slight fall of 153 on the previous week. Deaths are running at 15 per cent over the five-year average, although this straightforward comparison is misleading as the population is both growing and ageing. The 85+ age group is the fastest growing, so there are significantly more people around of an age where they are likely to die than there were five years ago.

Deaths where the certificate mentioned Covid-19 were 205 down on the week earlier. Still there is a mystery: non-Covid deaths continue to run at lower than average levels, as they have throughout the autumn bulge in Covid deaths. This was not the case during the bulge of deaths in the spring. People who would normally be dying from other things appear to be dying from Covid instead.

Written byRoss Clark

Ross Clark is a leader writer and columnist who, besides three decades with The Spectator, has written for the Daily Telegraph, Daily Mail and several other newspapers. His satirical climate change novel, the Denial, is published by Lume Books