Madgex Live

The Fallout from Furlough

So, who is all this aecting the most? Unfortunately, it seems to be younger people who are working in cities. Before all of this took place, around 11% of people age 16-25, not enrolled in university, were unemployed. This has now jumped to about 14%. 60% of those that were employed have been furloughed.

UK Furlough Uptake by age

70%

60%

50%

40%

30%

20%

10%

61 66 ONS - Oce for National Statistics

Reallocation Shock

The Response to Remote Working

The term “Reallocation Shock” is used by economists to describe the movement of wealth and consumer spending between sectors in times like these, but in this instance, we are looking at jobs shifting between sectors and industries.

With those still employed, many had to begin the new practice of working from home. A recent Gartner study has shown that “74% of CEOs say they will make remote working a larger part of the employee oering once lockdowns are over.” This move to working from home may become a more permanent part of our lives or at least be oered more freely than before. We expect this to be specied in job adverts or perhaps negotiated during interview stage.

A recent study by the University of Chicago said “we project that 32-42% of pandemic-induced layos will be permanent (in the sense that the job loser never returns to his or her old job). Thus, a successful recovery from the pandemic recession will require new jobs for at least 10 million workers.” This means that many are going to have to rethink their careers, or at least the path they’ll have to take to reach their desired goal. In particular, this is going to cause huge upheaval for Gen Z as they start their careers as well as Millennials who are already on the career ladder.