The total number of weekly hours worked in the three months to April 2020 was 959.9m, down a record 94.2m hours on the previous year – an 8.9% decrease.
The drop in the number of hours worked is telling, because it shows the drop in activity that is masked by the furlough scheme. Workers on the government scheme, which pays 80% of wages up to £2,500 per month, are classed as employed, but are not allowed to work. Many of them will return to work, but equally many will not.
Pay also fell in real terms for the three months to April 2020 for the first time since January 2018.
Ruth Gregory, senior UK economist at Capital Economics, said, “It was abundantly clear in every other indicator [apart from the unemployment rate] that the labour market has weakened dramatically.
“Since furloughed employees weren’t working, the total number of hours worked slumped by 8% 3m/3m. And the 20% pay cuts for workers that have been furloughed meant that the headline (three-month average of the annual) growth rate of regular average weekly earnings slumped from 2.7% in March to 1.7%, a five-year low.
“Overall, then, despite the apparent stability of the actual unemployment rate, the labour market data were still pretty awful. And some of this will surely start to filter through into the actual unemployment figures as the government’s job furlough scheme is wound down from August.”
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