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Public Sector PracticeCOVID-19 in the United
Kingdom: Assessing jobs
at risk and the impact on
people and places
Around 7.6 million jobs, or 24 percent of the UK workforce, are at risk
because of COVID-19-related lockdowns. People and places with the
lowest incomes are the most vulnerable.
by Tera Allas, Marc Canal, and Vivian Hunt
© Justin Paget/Getty Images
May 2020
, As governments around the world seek to save and business leaders. For a detailed explanation
lives by slowing down the spread of the coronavirus, of the methodology used, please refer to the
they are having to take dramatic measures, with sidebar in “Lives and livelihoods: Assessing the
big implications for economic activity. The United near-term impact of COVID-19 on US workers,”
Kingdom declared a lockdown on March 23, 2020, on McKinsey.com.
to control the COVID-19 pandemic. This seems to
have helped rein in the public-health crisis but is
taking its toll on the economy. The lockdown is already having a
major impact on jobs
In a typical lockdown week in May 2020, we We estimate that in the weeks from April 6 to
estimate that economic activity (as measured by 19, 2020, around 22 percent of the United
GDP) is down roughly 30 percent from February Kingdom’s working-age population, or nine million
2020 levels. According to the Office of National people, had been furloughed (Exhibit 1). At that
Statistics, in the weeks from April 6 to 19, 2020, time less than 1 percent of businesses reported
23 percent of businesses had temporarily closed ceasing to trade permanently or having laid off
or paused trading, with around 60 percent of people. However, the knock-on consequences of
businesses that continued to trade reporting a the lockdown are anticipated to result in significant
fall in revenues.1 Economic activity will recover as job losses down the road. Businesses’ ability to
lockdown restrictions are lifted, but the speed and continue to employ and pay workers might be
patterns are highly uncertain and will vary by sector. particularly precarious when government support
In McKinsey’s midpoint scenario, UK GDP in 2020 is starts to be withdrawn.
expected to shrink by 9 percent, overall.
In the four weeks from March 16, there were
Such a rapid fall in output has significant 1.4 million new applications for social assistance
implications for employment. We find that during through the universal credit system, a sixfold
lockdown, around 7.6 million jobs are at risk—a increase on previous levels.2 McKinsey’s modeling,
term we use to encompass permanent layoffs, in partnership with Oxford Economics, suggests
temporary furloughs, and reductions in hours and that in a midpoint scenario, unemployment could
pay. The risks are highly skewed: people and places peak at 9 percent, up from 4 percent in February
with the lowest incomes are the most vulnerable 2020. Some of this is likely to be because of
to job loss. Nearly 50 percent of all the jobs at risk furloughs being converted into job losses, while
are in occupations earning less than £10 per hour. some will be because of second-order effects
(The median hourly pay in 2019 was £13.30.) The felt in the supply chain upstream of the sectors in
proportion of jobs at risk in the 20 lowest-income lockdown, in the United Kingdom and abroad.
subregions—such as Blackpool, Stoke-on-Trent,
and Torbay—ranges from 23 to 29 percent, while the The implications for workers go far beyond those
range for the 20 highest-income regions is much furloughed or laid off, however. According to
lower, at 18 to 25 percent. research by the London School of Economics,
increased unemployment creates significant anxiety
In the rest of this article, we share our analysis of among those who retain their jobs; the negative
the jobs at risk in the United Kingdom and how they impact on well-being experienced by the whole
differ by region, sector, occupation, education level, community is four times the effect on the individual
age, gender, ethnicity, and family status. We also alone. 3 Moreover, for people still at work, much
suggest a number of priorities for the government has changed. Around 30 percent of the United
1
Business Impact of COVID-19 Survey, Office for National Statistics, May 7, 2020, ons.gov.uk.
2
“Coronavirus: Latest economic data,” House of Library Commons, April 23, 2020, commonslibrary.parliament.uk.
3
“When to release the lockdown: A wellbeing framework for analyzing costs and benefits,” Centre for Economic Performance, April 2020,
cep.lse.ac.uk.
2 COVID-19 in the United Kingdom: Assessing jobs at risk and the impact on people and places
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