Coronavirus – Women and under 25s hardest hit
In just a few short weeks, COVID-19 has sent shockwaves through the UK economy, with the Bank of England base rate plummeting to a historic low of 0.1% and lockdown forcing the closure of businesses nationwide.
Recent research into the financial impact of the coronavirus outbreak by the Institute for Fiscal Studies has found that female workers, low-income earners and those under the age of 25 may in fact be the hardest hit by the lockdown.
The report, titled, ‘Sector shutdowns during the coronavirus crisis: which workers are most exposed?’, delves into the numbers behind those sectors that have faced mass closures in recent times, including hospitality, retail, leisure, childcare and tourism.Get free advice
Women more likely to struggle
The IFS study revealed that women were more likely to be employed in those sectors that have been hardest hit. The study noted:
“Because women disproportionately work in retail and hospitality, COVID-19 is likely to have a bigger effect on their earnings. Overall, on the eve of the crisis women were about one third more likely to work in a sector that is now shut down than men: one in six (17% of) female employees were in such sectors, compared to one in seven (13% of) male employees.”
Under 25s also impacted
The report also found that the under 25 demographic would be two and a half times as likely to work in one of the impacted sectors, stating: “On the eve of the crisis sectors that are shut down as a result of social distancing measures employed nearly a third (30%) of all employees under the age of 25 (25% of young men and 36% of young women). This compares to just one in eight (13%) of workers aged 25 and over. (These figures all exclude full-time students with part-time jobs).”
Statistically, it’s also a concerning time for low-income earners, who have been found to be seven times as likely as high earners to be working in an industry that’s had to close.
According to the report, “One-third of employees in the bottom tenth of the earnings distribution work in shut down sectors versus just 5% of those in the top 10%.”Get free advice
Families may have to help
One saving grace is that those who fall into the younger and lower earner demographics may live with their parents or family, or share a household with others who have not been as negatively impacted by the outbreak.
The report found that, “This is particularly the case for young people whose jobs are most at risk since over half (61%) of under-25s who work in shut-down sectors live with their parents.”
However, for the many others who don’t have the cushion of their parents’ income or the support of other members of their household, the future is less secure.
What other sectors have been affected?
With half of the world’s population in lockdown it’s been estimated by the Asian Development Bank that the outbreak could impact the global economy by as much as $4.1 trillion. This is undoubtedly the biggest economic disruption in decades.
And here in the UK, in the third week of lockdown, it’s clear from the headlines that the closures and financial uncertainty have rocked once secure sectors to their core.
- The UK construction industry has seen an all-time plunge to its lowest output rate since the global economic recession in 2008.
- New car registrations have dropped by 44.4% in March (usually a busy month for the motor trade), to around 200,000 fewer year on year.
- According to a report by the Corporate Finance Network, almost 20% of small and medium-sized businesses may not be able to get enough money from the government to survive in April.
- High street retailer Debenhams has filed its notice of intent to bring in the administrators.
What measures are in place to help?
Last week it was revealed by the Department for Work and Pensions that in the first fortnight of lockdown, 950,000 people had applied for Universal Credit, the main income support benefit in the UK. Many of the applicants have been those who have been laid off as a result of industry closures.
The government also introduced its Coronavirus Job Retention Scheme earlier this month in a bid to reduce unemployment levels and mitigate the long term impact on the economy. The scheme offers a lifeline to many who would otherwise have faced redundancy. The scheme will pay 80% (or up to £2500) of workers’ salaries over the next three months.
If your finances have been transformed overnight by coronavirus and you’re facing doubt and uncertainty over how you’re going to pay off your mounting debts, we’re here to help you do something about it. Get in contact with one of our friendly, experienced team today to discuss a plan: 0808 253 3282.Get free advice