Low-paid women firmly shut out of the recovery

Progress, 11 September 2014

Dr Eva Neitzert

The facts are clear, unemployment is falling and there is an emerging recovery in the British economy. But new research from Fawcett shows that for many women the route into work has simply meant moving into a different kind of poverty, with growth fuelled by a rise in temporary and insecure work often in feminised, low-wage sectors of the economy.

Since 2008, an additional 826,000 women are in jobs that are typically low paid and insecure, and one in four female employees are now on low pay. Our survey of 1,003 low-paid women across the United Kingdom – all earning below £7.44 per hour – found that one in eight were on zero-hours contracts, with the figure for London a staggering one in three. Fifty-six per cent of these women felt worse off than 10 years ago, and half are dependent on some kind of benefit to make ends meet.

Self-employment has also seen a sharp increase since the crisis – with levels up 35 per cent; equating to an additional 371,000 women. Tempting as it may be to celebrate this as a rise in female entrepreneurialism, there are questions about how genuine much of this self-employment is – we have heard that some women have simply been transferred from employed to self-employed status, losing all of their attendant rights and protections – and we have grave concerns about the impact this shift will have on women’s incomes; the latest research shows the gender pay gap for self-employment currently stands at 40 per cent.

Given these trends, it is not surprising that last year the overall gender pay gap widened for the first time in five years. The mean now stands at 19.1 per cent for all employees. Labour has an opportunity to change this, by committing to improving women’s standing in the labour market and raising the incomes of those on low pay. Ed Miliband already announced a commitment to uprate the national minimum wage by more than average earnings over a period of five years – and this will be a key lever in tackling low pay with the increase of the NMW to £6.50 this October only restoring its value to 2005 levels in real terms. Given that women make up nearly 59 per cent of those earning below the living wage, this measure will also make a significant contribution to reducing the gender pay gap.

At the level of macro policy, there is a broader and more fundamental imperative to set out a vision for the economy that puts a halt to the hollowing of the middle of the labour market. Our research discovered high levels of under-employment – 22 per cent of the low-paid women in our survey were educated to degree level – with the most common reason given that ‘there were no appropriate jobs available’.

Putting the economy on a footing where it provides quality jobs that pay a decent wage is a tall ask, but there are also a number of ‘quick wins’ that a post-2015 Labour government can action. Instating section 78 of the 2010 Equality Act, which requires all large employers to carry out and publish mandatory gender pay audits, is a clear frontrunner, and the Lib Dems have already made this commitment. Abolishing, or at least significantly reducing, upfront employment tribunal fees that are pricing many workers out of justice, including women affected by discrimination, is another. And, of course, there must be action to end the misuse of zero-hours contracts. Vince Cable is currently pursuing legislation to ban exclusivity clauses, but the protections for vulnerable workers must go beyond this measure. Finally, there is a need to restore and then progressively uplift the value of maternity pay, which during the austerity years has lagged significantly behind inflation (and was already at a low level going into the crisis).

The increasing public focus on gender equality and all things feminist means that the women’s vote will be a very real battleground in the run up to the 2015 election – Labour should leap on this fantastic opportunity to make economic equality for women one of its key rallying cries.


Eva Neitzert is deputy chief executive of the Fawcett Society


The Changing Labour Market 2: Women, Low Pay and Gender Equality in the Emerging Recovery is available for download from the Fawcett Society

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