Low paid women 'shut out of economic recovery'

Published on Monday, 18 August 2014 11:46
Written by Govtoday staff

New research released today by the Fawcett Society shows that women - and especially those on low pay - are firmly shut out of the recovery.

The new report, The changing labour market 2: women, low pay and gender equality in the emerging recovery, includes analysis of national employment data and a survey of 1,003 low paid women. Key findings include:

  • Since the start of the crisis in 2008, almost a million (826,000) extra women have moved into types of work that are typically low paid and insecure. Since 2008, female under-employment has nearly doubled (to 789,000) and an additional 371,000 women have moved into self-employment, which is typically very low paid. One in eight low paid women now describe themselves as on a zero hours contract.
  • The increasing levels of women in low paid work, along with the declining value of low pay, is contributing to the widening inequality gap between women and men. Last year the gender pay gap increased for the first time in five years and now stands at 19.1% for all employees.
  • Low paid women are feeling the cost of living crisis sharply: nearly one in two say they feel worse off now than five years ago; nearly one in 10 have obtained a loan from a pay day lender in the last twelve months; nearly one in 12 low paid women with children have obtained food from a food bank in the past twelve months.

Commenting on these findings, Dr Eva Neitzert, deputy CEO at the Fawcett Society, said: "The evidence is clear: after five years of decline, the UK economy is back on the upswing. Employment is up, unemployment is down and GDP is improving. However, as our research shows, low paid women are being firmly shut out of the recovery.

"The numbers of women in low paid, insecure work are still alarmingly high. Since the crisis in 2008 we have seen a nearly two-fold increase in the numbers of women working in insecure, part-time and temporary jobs where they would prefer to be in secure, full-time roles. In addition, 371,000 more women have moved into self-employment - a form of work which is typically very low paid and where women earn an average of 40% less than men.

"We have also seen a sharp rise in the numbers of women on controversial zero hours contracts - one in eight low paid women now describe themselves as being on a zero hours contract, the majority through necessity rather than choice. Overall, since 2008 almost a million extra women have moved into types of work that are typically low paid and insecure.

"We are concerned that at a time when the numbers of women on low pay are increasing, the value of their pay is declining in real terms, meaning they are struggling more than ever to makes ends meet. One in two low paid women told us that they felt worse off than five years ago.

"Even the planned increase to the national minimum wage this October will only increase the value of the wage to 2005 levels in real terms. It is clear that work is not providing a sufficient route out of poverty for low paid women: almost half are being forced to rely on benefits to top up inadequate wages, one in 10 are accessing pernicious pay day loans and one in 12 low paid women with children are having to resort to food banks.

"Our research also reveals that many low paid women are working substantially below their qualification and skill levels. Over a third consider themselves over-qualified for the job they are doing and shockingly, over one in five of those working below £7.44 per hour are educated to degree level. This is not only bad for individual women, it's hugely damaging to the economy at large with talent simply going to waste.

"Whilst the economy moves into recovery it's clear that that low paid women are not benefitting and, in many respects, are seeing their position deteriorate. In turn, this is contributing to the widening inequality gap between women and men. Last year we saw the gender pay gap, one of the key indicators of equality between women and men, increase for the first time in five years. On average, women now take home only 81p for every £1 a man earns. After years of slow but steady progress, this is a damming indictment of the government's record when it comes to women's standing in the economy.

"Overall, one in four of all female employees in the UK is in low paid work, compared with around one in seven men. This equates to around 3 million female workers. From cleaners, dinner ladies and care assistants to supermarket workers and admin assistants, these women undertake crucial work that helps to hold the fabric of society together. But rather than benefitting from the current growth we are seeing in the UK, it is clear that the situation for these women is actually declining.

"All the major parties have talked about how vital it is that the skills and abilities of women are fully utilised in the emerging recovery, and of the need to tackle the on going inequality gap between women and men. In order to prove that they are serious about this, and that when they refer to 'women' they mean all women, there are a range of firm commitments we would like to see the parties include in their 2015 election manifestos.

"We urgently need to tackle the unacceptably low wages paid to women by substantially increasing the value of national minimum wage. Government should also take the lead in supporting the take-up of the Living Wage by encouraging local councils to adopt it and through instating it across Whitehall.

"At the same time, more must be done to increase the availability of quality, part-time and flexible roles –again, government should lead the way by ensuring that all roles in the public sector are advertised on a flexible basis as routine.

"Last month we warmly welcomed the announcement by the Liberal Democrat party that they will be including a commitment in their manifesto to enact section 78 of the Equality Act which requires big businesses to publish information on their gender pay gaps. This is a long-standing Fawcett demand, and will help lift the lid on unequal pay for at least 1,750,000 employees in the UK. We would now like to see all the other major parties match this commitment and show that they too are serious about addressing the scandal of the widening gender pay gap."

Source: Fawcett Society

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