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Warning that Unemployment Could Rise to 20% in Wales

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Wales’ most influential thinktank, the Bevan Foundation, is warning that unemployment could rise to 20% in the coming months. 

Women, young people and people in rural Wales and the valleys could be hardest hit.

Wales’ most influential thinktank, the Bevan Foundation, is warning that unemployment across Wales could rise to 20%. The stark forecast comes as support for thousands of workers via the Job Retention Scheme and Self Employed Income Support Scheme winds down.  The forecast increase is on top of a record rise in the number of benefit claimants last month and an influx of school-leavers and graduates onto the jobs market over the summer.

Director of the Bevan Foundation, Victoria Winckler, said:

The UK Government is protecting half a million people in Wales who cannot work because of the coronavirus outbreak. But as that support is withdrawn, workers may not be recalled by their employer or they may not be able to work because they don’t have childcare or cannot drive or cycle to work. If half of those on furlough or the self-employed scheme don’t go back to work, unemployment will inevitably soar.

The Bevan Foundation says that women, young people and people in low-skilled jobs are at the greatest risk of becoming unemployed. They are already more likely to have been furloughed than others, so would be hit hardest if they are made redundant.

Director of the Bevan Foundation, Victoria Winckler, said:

Being unemployed is really bad for you. It causes real hardship in the short term, but it can also scar people for life by affecting health and future job prospects. We’re calling for the Welsh Government to establish a jobs and learning guarantee, so that everyone who wants a job or to learn a new skill can do so. Help and advice is fine, but only if there are jobs out there.

The thinktank also finds that jobs are already being lost in Wales due to the pandemic, and that earnings have fallen as many employers have not ‘topped up’ furloughed workers’ earnings. On average, the lowest paid fifth of employees are nearly £50 a week worse off while the second lowest fifth are £77 a week worse off.

Victoria Winckler continued:

This is a massive hit to people’s budgets. If you’re just about making ends meet, a cut of £50 to £77 means you can no longer afford essentials such as rent, bills or food.