Unequal impact? Coronavirus and the gendered economic impact Contents

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2Labour Market and Employment

4.In this Chapter we consider how the Government’s main policies, particularly the Coronavirus Job Retention Scheme, specifically impacted on women and affected pre-existing trends or inequalities in the labour market. We consider how flexible working, necessitated by the pandemic, impacted gender equality in the workplace. Finally, we consider whether the Government’s priorities for growth and recovery are likely to create equal economic opportunities for men and women.

Pre-pandemic trends

5.On the eve of the pandemic, women’s labour force participation reached a record high in the UK: female employment stood at 72% in the final quarter of 2019, 1.94 million more women were in work compared to a decade before, and the share of women working full-time increased strongly between 2015 and 2019.4 However, as noted by the Women’s Budget Group (WBG), the headline employment figures by gender “mask considerable variation in the rates of participation in paid work by ethnicity and disability”.5 Furthermore, long standing gender differences in sectors, occupations, earnings, working hours, and employment security remained. This was evident across a variety of measures:

• The gender pay gap for median gross earnings (excluding overtime) amongst all employees was 17.3% in 2019. 79% of occupations had a gender pay gap of more than zero.6
• Women were more likely than men to work part-time,7 and made up the majority (58%) of those in involuntary part-time employment.8
• Women were the majority of those on temporary contracts (53%) and on zero-hours contracts (55%).9
• Female employees were more likely than male employees to be working in jobs paying the National Minimum Wage. Low paid women were more likely than low paid men to remain stuck in low paid jobs.10

Labour Market Policy Over the Pandemic

6.The pandemic bought about an unprecedented labour market shock and prompted a swift and wide-ranging policy response in order to protect jobs. The two key pillars of the Government’s labour market policy response have been the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS). In the light of the evidence we received, we focus below on the CJRS.

The Coronavirus Job Retention Scheme

7.The CJRS, often referred to as the “furlough” scheme, was announced on 20 March 2020 and allowed employers to furlough workers for a minimum of three weeks, with the Government contributing 80% of employees’ salaries, up to a cap of £2,500 per month.11 By 14 June 2020, more than 9 million jobs–around a third of UK employees–had been furloughed under the CJRS. Under the scheme, employers could “top-up” salary payments, but workers were not permitted to work any hours until the introduction of flexible furlough on 1 July.

8.On 24 September, the Government announced a new Job Support Scheme (JSS) to replace the CJRS on 31st October.12 However, concerns were expressed that the design of the JSS did not give employers a financial incentive to retain workers part-time.13 On 22nd October,14 the Government announced a revised JSS with a lower minimum hours requirement and reduced employer contributions to create a stronger incentive for firms to retain workers part-time and to protect low-paid jobs.15 Following the announcement of the second national lockdown,16 it was announced that the CJRS (with the option of flexible furloughing) would be reintroduced until 31st March 2021.17 This was again extended to the end of April 2021.

Gendered Employment Impacts of the Pandemic Policy Response

9.The pandemic has caused severe disruption to the labour market. 370,000 workers were made redundant over August-October 2020, a record high, according to the ONS.18 While falling employment amongst men was largely driven by full-time self-employed men, falling employment amongst women was concentrated amongst part-time workers.19

10.The IFS estimated that women were a third more likely to be employed in sectors that were “shut down” over the first national lockdown, and thus particularly at risk of job loss.20 HMRC statistics show that in most countries and regions more women than men were furloughed at 31 July.21

11.Witnesses told us that gendered impacts of the pandemic were predictable given that women, particularly BAME women,22 were disproportionately employed in less secure, low quality work arrangements.23 A number of studies have found that those in insecure work, including zero-hours arrangements and temporary employment, suffered greater falls in earnings and hours over the pandemic than those on more secure contracts.24

12.Workers on less secure contracts who were eligible for the CJRS have faced different experiences while furloughed. Furloughed workers on less secure contracts were less likely to have had their wages topped up by their employer beyond the 80% subsidy provided by the government.25 As women are more likely to be employed on insecure contracts, this has meant that women were 10 percentage points less likely than men to receive a discretionary top-up to their furloughed earnings.26

Combining work and care

13.The pandemic has caused great disruption to care responsibilities. The gender gap in total childcare time increased over the pandemic; women increased the number of hours devoted to care by more than men, putting an additional burden on working mothers.27 IFS research found that mothers found it harder to work productively from home during the pandemic.28 Adams-Prassl et al found that mothers were 10 percentage points more likely than fathers to ask to be furloughed, while there was no gender gap amongst those without children.29

14.Furlough was not clearly articulated as a right for those with caring responsibilities.30 Professor Rubery noted that this was at odds with the majority of EU member states, which made parental leave for care reasons a right over the pandemic.31 Witnesses argued that workers with caring responsibilities should have had the right to be furloughed,32 and that its absence has had a disproportionate effect women’s employment.33 Pregnant then Screwed also criticised the all-or-nothing design of the original CJRS which had led to an “unfair division of domestic labour” and increased the risk of women being “earmarked for redundancy”.34

15.Professor Rubery made a connection between the original design of the furlough scheme and future redundancies:

If everybody had been put on short-time working, we would have had less of a situation where those on furlough would be those being lined up for possible redundancies.35

16.The Government acted at considerable speed to design and implement schemes to protect jobs, and the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) have provided a vital safety net to millions of people. However, the design of these schemes overlooked - and in some respects continues to overlook - the specific and well-understood labour market and caring inequalities faced by women. This demonstrates the importance of equality analyses.

17.We recommend that schemes to support employees and the self-employed should be informed by an Equality Impact Assessment, drawing on evidence of existing inequalities. The Government must conduct and publish Equality Impact Assessments of the CJRS and the SEISS alongside its response to this Report. We believe this approach would better protect those already at disadvantage in the labour market, including women, and could inform more effective responses to future crises.

Priorities for the Recovery

Inclusive Growth

18.On 30 June, the Prime Minister announced a ‘New Deal’, with the theme of ‘Build, Build, Build’, to counteract the economic impacts of Coronavirus.36

19.Witnesses were critical of the Government’s priorities for recovery. Professor Rubery critiqued the gendered language of the economic recovery, arguing that the Government must “move beyond the “build, build, build” rhetoric”.37 Dr Stephenson questioned both the economic and equality bases of this approach:

the focus on shovel-ready projects, hard hats and hi-vis jackets suggests a focus on jobs that historically have been more likely to be done by men. It is really important to provide training and support for women to enter into those sectors and to get jobs in those industries, but looking at what, in the short term, would deal with the immediate crisis of loss of jobs in retail and hospitality, investment in care creates more jobs more quickly. Construction always has a time lag, however shovel-ready the project.38

20.Witnesses stressed the economic case for greater investment in the care sector including childcare.39 Some 42% of UK families have dependent children; care-givers in these families cannot work effectively and consistently without access to affordable, reliable childcare. Before the pandemic, the most common reason for economic inactivity amongst working age women was “looking after family/home”; 1.7 million women were economically inactive in the final quarter of 2019 for this reason.40 Lack of childcare was identified as a major barrier to the take-up of adult learning in pilots of the National Retraining Scheme,41 which is particularly concerning given the increased need for job-seekers to retrain in viable sectors. Dr Stephenson told us that WBG modelling had estimated a “care-led” recovery would “create over 2 million jobs, vastly more jobs for women, but actually significantly more jobs for men than, for example, investment in construction”.42

21.We asked the Minister for Equalities about the focus on typically male-dominated industries to which she responded, “We are not providing policies based on where men and where women work”.43 She continued:

If the question you are asking is whether we have specific policies on this issue of perhaps getting more women into STEM, that is not something that Treasury would look at. We would expect other Departments that own those policy areas to bring their proposals to us. We cannot do all the thinking within Treasury, or even within the Government Equalities Office.44

22.We are concerned that the Government’s priorities for recovery are heavily gendered in nature. Investment plans that are skewed towards male-dominated sectors have the potential to create unequal outcomes for men and women, exacerbating existing inequalities.

23.The Treasury must provide Equality Impact Assessments for the Industrial Strategy and ‘New Deal’. These should include a Gender Beneficiary Assessment of investments from the industrial strategy to date, including receipts of grants, gender occupational composition of companies operating infrastructure contracts, innovation grants and training participants and outcomes. The Treasury should also undertake an economic growth assessment of the Women’s Budget Group’s care-led recovery proposals. We recommend the Government publish these assessments within six months.

24.Women are traditionally under-represented in sectors that have been singled out for Government investment, such as science, technology, engineering and maths (STEM) and construction. More must be done to tackle gender inequalities in representation and career progression in these male-dominated sectors so that women do not lose out in the recovery.

25.We recommend the Government fund training schemes specifically aimed at women in the Digital, AI, and the Green Economy through its Kickstart, New Training Fund and Restart programmes.

Working from home

26.The labour market impacts of the pandemic raise wider issues for labour market policy in general and priorities for the recovery. The pandemic has bought about a big shift in working from home. Working from home brings opportunities for gender equality in the labour market. In April last year, the Minister for Women and Equalities told us of the potential for positive change in this regard:

… a lot of employers who previously said people could not work from home are now finding that they can absolutely deliver from home. We should take the opportunity to capitalise on some of those cultural changes that have happened to make it easier for people balancing family and career to work from home, to make it more flexible and to challenge the culture of presenteeism, which has been very alive in business and has also been very alive in politics.45

27.However, working from home could create challenges for career progression. Dr Brown argued that the ability to work from home could be a “silver lining” from the pandemic for women with children, while also warning of a definite risk of “permanent home workers being left out of the career ladder”.46 A number of witnesses pointed out that working from home does not cause care responsibilities to vanish.47 As Dr Costa Dias described:

… working from home for women is not the same thing as working from home for men… The number of hours [that women] have of uninterrupted work is minimal, while the fathers are much less likely to be interrupted… [This] may be damaging for her career prospects. Continuing to work […] offers a less professional image of working mothers than working fathers.48

28.Nonetheless, witnesses said that greater flexibility to work from home, for those who want to, was something that should be made easier for workers. The Flexible Working Regulations 2014 provide eligible employees with a statutory right to request a flexible work arrangement (including hours, schedule and location changes). To be eligible, an individual must be an employee and have worked for 26 consecutive weeks for their employer. Professor Rubery argued that the pandemic has revealed how “unnecessary” the 26-week work service threshold in the Flexible Working Regulations was:

I cannot see any real reason why people at the point of hiring cannot be given that opportunity […] This is vital, because at the moment flexible working arrangements trap women into working for the employer with whom they have negotiated a reasonable working arrangement.

29.We recommend the Government amend the Flexible Working Regulations 2014, to remove the 26-weeks’ service threshold for employees to request flexible working arrangements. The pandemic has clearly demonstrated that it is unhelpful and unnecessary.

Employment rights and enforcement

30.The 2017 Taylor Review of Modern Working Practises, culminating in the Good Work Plan, provided a detailed assessment of the quality of work in the UK labour market. The Employment Bill was expected to implement a number of aspects of the Good Work Plan, including provisions around flexible working, employment status, labour market enforcement, extending redundancy protection for expectant and new mothers, carer’s leave and extended leave for parents of babies in neonatal care. No draft Bill has been published. Dr Brown argued that implementation of the Good Work Plan and the Employment Bill were “key” for embedding gender equality in future labour market strategy and would help to address issues relating to insecure work and flexible working.49

31.The Government should publish the draft Employment Bill by the end of June 2021. The draft Bill must take into account the recommendations made throughout this report.