Recession 'widening class divisions'

Tuesday, 8 September 2009 12:01 AM

By Alex Stevenson

Struggling low-earners hit harder by the recession have destroyed the myth the downturn is "classless", the Trades Union Congress has claimed.

An analysis of unemployment figures over the year to July shows the ailing retail sector has been especially badly hit, contributing to the jobless rate for workers in low-skilled positions hitting 12.7 per cent.

That compares to 2.3 per cent for those in professional occupations, revealing the full extent of the recession's impact on the low-paid.

"It's the low-skilled and the low-paid who are bearing the brunt of this recession. And they are certainly not seeing any recovery," TUC general secretary Brendan Barber said.

"With unemployment set to increase throughout the whole of next year, and possibly beyond, tackling joblessness must be government's number one priority.

"It's clear many people are spending a long time on the dole, and £64.30 a week is not enough to get through the week. Increasing jobseekers' allowance (JSA) by as little as £10 a week would make a real difference to millions of families.

"The government must do all it can to tackle joblessness and the permanent scar of long-term unemployment."

With low-paid workers more likely to spend longer on the dole than other groups the problem is likely to remain long after green shoots have cheered headlines in national newspapers.

Liberal Democrat Treasury spokesman Vince Cable has been especially outspoken about the likelihood of lingering unemployment continuing to hurt the economy long after GDP returns to positive growth.

The Resolution Foundation, a thinktank devoted to low-earners, pointed out that job losses in the manufacturing and construction sector are also likely to hit low-earning employees disproportionately.

It recently completed an audit which showed that while white-collar workers suffered initially, low-earners are emerging as the longer-term victims of the recession.

Commenting, research and policy director Sophia Parker warned: "The danger is that low earners losing their jobs today become lost to the labour market forever because of the difficulty - due to low skills levels - they have in bouncing back."

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