Pandemic Lockdown to Hit the Young, Low-Paid, and Women Hardest: Study
Sun, April 18, 2021

Pandemic Lockdown to Hit the Young, Low-Paid, and Women Hardest: Study


Low-paid, young, and women workers are most likely to be affected by the coronavirus lockdown, a new study says.  / Photo by hedgehog94 via Shutterstock


Low-paid, young, and women workers are most likely to be affected by the coronavirus lockdown, a new study says. The Institute for Fiscal Studies (IFS), an economic research institute in London, has found that low-paid workers, employees under 25, and women will be hit the hardest by the economic effects of the lockdown. There is a “remarkable concentration” of lower-paid and younger workers in the sectors, including transport services, retailers, pubs, hotels, and restaurants, that are most affected by the coronavirus measures. One in six female employees also worked in firms hit by the lockdown compared to one in seven of male counterparts

IFS economist Xiaowei Xu said via British daily The Guardian that fortunately, many of these workers will have the cushion of incomes coming from other household members, such as their parents. But this is for the short term. In the long run, there will be serious concerns about the effect of the pandemic on the younger workers and inequality in general.


Studying workers in sectors affected by the shutdown

The IFS study further shows that 61% of those under 25 years old who worked in sectors affected by the shutdown are still living with their parents and tend to contribute a low proportion of household income at a 16% average. Based on the International Labour Organization’s modeled estimate, the labor force participation rate for ages 15-24 in the United Kingdom in 2010 was at 58.548%, 2011 (58.04%), 2012 (58.378%), 2013 (57.938%), 2014 (57.407%), 2015 (58.164%), 2016 (57.889%), 2017 (57.095%), 2018 (56.951%), and 2019 (56.742%).

The recent IFS study comes as the United Kingdom’s confidence in the economy has recently declined to its lowest since the last 12 years caused by the coronavirus pandemic that lessens consumer confidence. Consumer confidence measures how optimistic or pessimistic consumers are concerning their financial situation. The last time the confidence index fell that low was during the 2008 global financial crisis. At that time, the crisis led to the Great Recession, wherein housing prices declined more than the plunge of price during the Depression.



Consumer confidence index

The Organization for Economic Co-operation and Development, an intergovernmental economic organization founded to stimulate economic progress and world trade, also published UK’s CCI in January 2014 at 100.27, slightly increasing to 101.05 in June of the same year. It was at the highest in December 2015 at 101.58 but dropped to 100.41 in July 2016. As of February 2020, UK's CCI was at 100.52. Values below 100 indicate a pessimistic attitude towards future developments in the economy, possibly leading consumers to consume less and save more.

By March, the consumer confidence weakened by two points as the country faced the threat of the dramatic slowdown in the economy because of the spread of the Covid-19. “We’re now seeing very clear disruption,” said market research institute GfK’s client strategy director Joe Staton. Although it doesn’t match the devastating numbers the UK saw in 2008, the country may likely suffer further deterioration as Britain is already on lockdown.

GfK suggested that the grocery sales record was not enough to counter the “stark” outlook for the retail sector in the United Kingdom. The market research institute has gauged the drop of consumer index by asking people in mid-March and at the end of March how confident they were regarding certain things, such as the general economic situation of the country or their personal finance.

The result shows that many are expecting their household and personal financial position to likely worsen in the next year. The decline of confidence in the wider economy and people’s personal financial situation reflects concern across the United Kingdom, Staton added.



UK supermarket sales growth

Supermarkets in the UK had their best month on record in March before the lockdown as shoppers hurried to stockpile. Data company Kantar reported that grocery sales in the country rose to 20.6% year on year in the fourth week ending March 22. This means an average household spent an additional £62.92 on their spending. The grocery sales growth was driven by people buying slightly more or buying more frequently. This led to panic buying patterns with products including pasta, chopped tomatoes, and toilet paper becoming more difficult to find.

Staton, however, warned that consumers may plan to withhold from making unnecessary purchases in times of economic uncertainty. This means that the boom in grocery spending is only temporary and it may mean a disaster for high-street chains that were forced to close their stores because of the pandemic.

GfK’s client strategy director further said that despite the peak of grocery sales and increase of purchases of home office equipment, TVs, and freezers as people prepare for quarantine, the country’s Major Purchase Index has fallen by 50 points. This creates a bad forecast for the retail industry. It is believed that 20% of small businesses in the UK may fold this month because of the decline in consumer demand despite government intervention to support jobs in the country. Businesses in the UK are allowed to claim 80% of their employees’ wages from the government for up to £2,500 per person, for every month before tax. This was based on a separate report by the BBC. The scheme will end at least at the end of May and may be extended beyond if necessary.


The UK will be introducing a loan scheme to support small- and medium-sized businesses. / Photo by via Shutterstock


2020 budget plan

Chancellor Rishi Sunak, who delivered the 2020 UK budget report, said that he is expecting the pandemic will have a “significant impact” on the economy and that the UK will be introducing a loan scheme to support small- and medium-sized businesses.

In the last two weeks alone, 950,000 successful applicants were provided university credit benefits by the Department for Work and Pensions. Normally, it would only expect around 100,000 claims in the same period.

The figures outline the pain of millions of employees in the country whose jobs become at risk weeks after the lockdown that was meant to contain the virus. Although many workers in the country will still be paid with a certain pay cut under the coronavirus furlough scheme (kept on the payroll despite not working because of coronavirus outbreak), millions of jobs may be made redundant.