CITIES across Scotland with typically higher wages have had a slower recovery from the pandemic, a new report has revealed.
Research by the Resolution Foundation published today shows that across the UK, the cities where people are paid more have further to go to reach employment levels equal to those before the pandemic.
In Edinburgh and Aberdeen, where wages are typically higher, the number of people employed in June this year was 2.2 and 3.5 per cent down, respectively, compared to February 2020.
In Scotland overall, there are still 1% fewer employee jobs than there were in February 2020.
The country comes third lowest of all areas of the UK in terms of jobs recovery, with London the furthest behind (3.2% fewer jobs than before the pandemic) followed by the south east of England (1.1% fewer jobs).
According to the report, those who are on low wages in these typically higher-earning cities are likely to account for many of the job losses.
It explained: “This geographic trend comes despite Resolution Foundation research showing that lower-wage workers have borne the brunt of the pandemic’s labour market impact.
“It is likely therefore that it is low-paid workers in high-wage areas that have experienced the bulk of this job fall.”
It added: “Overall, a fall in demand for workers in wealthier neighbourhoods implies that affluent residents in cities are not spending to the same extent as they were pre-pandemic, be that because of pandemic-induced falls in consumer confidence or forced closures to bars and restaurants.”
However, similar to the rest of the UK, areas popular with tourists have had a faster pace of recovery as restrictions have eased.
In June last year in the Highlands, 34% of people were on the UK Government furlough scheme, and even in February of this year the area had some of the highest rates of furloughed staff in Scotland, at 19%.
This has now fallen, with just 6% of people on furlough as of June 2021, as people began travelling around more, and restaurants, hotels and bars began to open up.
Economist and author of the ‘Levelling up and down Britain’ report Charlie McCurdy warned that home working could continue to impact those already on low pay.
He explained: “As Scotland continues along its reopening roadmap, there is plenty of space for its cities to catch up. But a structural shift towards more home-working could have a lasting impact on the geography of the UK labour market, further hindering the living standards recovery for Scotland’s low-paid workers.”
He added: “In the early part of the crisis, city centres and coastal areas were especially hard-hit because many jobs in such places depend on demand from people outside the area. Scottish cities including Edinburgh and Aberdeen have seen the greatest fall in employees during the pandemic out of all areas outside of London, despite being among the highest-wage areas of the UK.
“By June 2021, jobs in many tourism-reliant areas had bounced back to pre-pandemic levels, with a weaker recovery seen among many Scottish cities. But Scotland has some distance to travel to return to pre-crisis employee job numbers, with jobs still 1 per cent lower than pre-pandemic levels – lower than across the UK overall.”
The report also noted that cities have struggled to return to pre-pandemic employment levels due to the increase in home working for many people.
It explained that while workers were reluctant to go to the office again, they were not so wary of going on holiday – all over the country.
It states: “Overall, different types of behaviours appear to be driving the geography of this summer’s recovery. The reluctance of many to go back to the office is clear. Google mobility data shows that in late July, for example, trips to work in Edinburgh, Cardiff, Belfast and London were still down at least one-third on pre-pandemic levels. At the same time, retail and leisure trips were up at least one-third in Cornwall, Gwynedd, and Argyll and Bute.
“Put simply, Brits have been far keener to go on holiday than start commuting again.”
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