State of the Region 2020 Full Report

There is a rising concern about redundancies with a rise from 2,400 in April to 5,500 in May, significant regional announcements include Rolls Royce, Aston Martin, Triumph, Churchill China and Forterra, with Intu Merry Hill putting administrators on standby. Also concerns about quarantine and its impact on international trade flows and activity, still no support for ltd company directors.

Across the WMCA (3 LEP) area, 496,200 people have been furloughed which accounts for approximately 26.9% of jobs. The Black Country LEP area has the highest levels of staff furloughed at 31.7% across the 3 LEP areas. Tamworth has the highest number per 10,000 WAP for the total number of employments furloughed at 2,508. While Wyre Forest has the highest percentage when proportioned to jobs at 41.9% significantly above England at 24.8%.

Latest unemployment (still not covering the whole pandemic period) tells a story of a labour market in stasis: the West Midlands region is now at 74.5% employment down only -0.7pp since last quarter, with unemployment up slightly to 4.8% and inactivity rates increasing to 21.7%. There were 207,635 claimants aged 16 years and over in May 2020 in the WMCA (3 LEP) –this is an increase of 36,390 claimants since April 2020. This increase equates to 21.3% for the WMCA (3 LEP) compared to 26.6% growth for the UK. There were 41,225 youth claimants in the WMCA (3 LEP) area in May 2020, this is an increase of 8,775 people compared to April 2020. This equates to an increase of 27.0% –while the UK saw an increase of 32.3%. 

Comparing unemployment by ethnic groups in the West Midlands, as noted previously unemployment rates were stark, where 11% of ethnic minority groups are unemployed (albeit there are marked differences between ethnic groups) compared to 5% of white groups. Disparities in health outcomes, educational outcomes, crime, age, income and hostile immigration, all contribute to racial inequalities. CV19 is likely to worsen these issues. Although there is not recent data on claimants by ethnicity, preCV19 Black or Black British groups faced higher unemployment levels. Mapping where the increases in claimants are, these are largely in areas with high black populations and greater employment in sectors which are closed.

• 496k people have been furloughed accounting for 27% of employment in the region
• Claimants have increased by 93ksince February
• Universal Credit claims 7.3 times higher than same time last year
• Significant redundancy announcements at key flagship companies, especially in automotive and aerospace Rolls Royce, Aston Martin and Triumph

Inequality is likely to get worse, as in previous recession/pandemics. Employees aged under 25 years are about two and a half times as likely to work in a sector that is now shut down, as others, so raising the need for specific interventions to support them. Universal Credit (UC) in the last fortnight of March 2020 was 7.3 times higher than the same period a year earlier

We already have high youth unemployment in the region and low skills levels, which puts us at higher risk of longer term scaring effects on our young people, where they take longer to get into the job market and into good jobs. This will have a significant effect on areas already suffering deprivation and inequality. In economic downturns, young people tend to stay in education, but the disruption in the education sector due to closure may put many off this alternative. Therefore the region’s young may be further disadvantaged.

The move to homeworking has exacerbated inequality the ability to work by housing tenure shows that 54% of social housing renters are unlikely to be able to work from home, compared to 33% of private renters and 27% of those with mortgage owned properties.

• Under 25s - 2.5 times more likely to work in a sector which is shut down 

• Scaring effects young low, skilled are more likely to be unemployed