Yahoo Finance Coronavirus: 10 million jobs may need to be created to tackle pandemic damage
Britain's job crisis is much bigger than previously thought and millions of private sector jobs will need to be created to offset the damage caused by the coronavirus pandemic, a new study suggests.
The analysis of Britain’s "jobs miracle" from 2013 to 2019, examines what occurred after the last financial crisis when seven new private sector jobs were needed to create one viable job.
This meant that the UK's economy created 2.7 million new jobs to combat the financial crisis — 19.3 million private sector jobs were created during this period and 16.6 million were lost.
According to the research by the Centre for Cities in partnership with HSBC UK (HSBA.L), a repetition of that pattern post-COVID would mean 9.4 million new private sector jobs will be needed to get the 1.3 million people who lost their jobs during the pandemic back into work.
Following the financial crisis, big cities in the UK created the vast majority of new jobs, this is expected to happen again post-pandemic.
At the time, London alone created one in four of all new private sector jobs (790,300). Other big cities also played a role. In Manchester, 152,100 new jobs were created, 99,100 in Birmingham and 40,800 in Glasgow.
Overall, the UK's ten largest cities created 45.6% of jobs between 2013 and 2019, despite accounting for just 3.5% of land. In contrast, smaller towns and rural areas created 36% of new jobs.
READ MORE: Universal basic income study shows it could make unemployment worse
While the hospitality and tourism sectors have seen hundreds of thousands of jobs go during the coronavirus crisis, the study says these are expected to recover quickly once the economy reopens. It estimates that three quarters of new jobs will likely come from industries such as these.
But researchers warn that relying on them for new jobs "will not address years of poor productivity and pay stagnation," especially outside London and the Greater South East and that after the pandemic, the productivity problem that UK cities face "will need to be addressed."
To do this, it calls on the government to invest in adult education to train people for higher-paid jobs in emerging sectors. It should also recognise the crucial role that cities will play in building back better from the pandemic.
Additionally, the study suggests that the government should invest £5bn ($6.9bn) in a new City Centre Productivity Fund to make struggling city centres more attractive places for high-skilled businesses to locate.
The paper’s other proposals include reforming business rates and "devolving more economic powers and resources" to local government – particularly England’s metro mayors.
CEO of HSBC UK, Ian Stuart, said: "The employment challenge ahead for the country’s economy cannot be underestimated. Beyond the sheer volume of new jobs required, the UK will need to create high value, export-led employment across all regions, if it is to address the age-old productivity puzzle.
"Coming out of the COVID-19 pandemic, we will only truly succeed in levelling up the country if the challenge is shared between government and the private sector with a focus on reskilling our people and attracting new business growth and international investment in the sectors where we have a real competitive advantage."
WATCH: What UK government COVID-19 support is available?
