What will the end of furlough mean for women’s employment?

Despite the latest data showing that one-quarter of employers across the UK were still using the scheme, the UK Government’s Job Retention Scheme is scheduled to finish at the end of September.

Furlough has been a welcome, if imperfect, intervention by the UK Government. The scheme has supressed unemployment, with cumulative data showing that over 910,000 jobs in Scotland have been furloughed over the course of the pandemic. Given women’s concentration in service sectors such as retail and hospitality, the scheme has enabled women who work in these sectors to protect some of their income during prolonged periods of sector shutdowns.

The decision to end the scheme in September has been viewed by some as an arbitrary decision, not tied to any particular milestone in the pandemic or the state of the economy. Indeed, the trajectory of the pandemic still remains somewhat unclear. In Scotland, positive cases and hospitalisations have been on the rise again and it is likely that there may be further surges in the winter months. In the absence of furlough to protect jobs during any future lockdowns or sector shutdowns, there are concerns about unemployment in the coming months.

Data on the Job Retention Scheme shows that 116,500 employees remain on furlough in Scotland. While women accounted for majority of those on furlough in Scotland from July 2020 to April 2021, the latest data shows that women account for 49% of those still on furlough. Previous analysis by Close the Gap found that younger women were more likely to be furloughed than their male counterparts. This remains true, with women making up 55% of furloughed staff among those aged under 18. However, the highest take-up rates of furlough now reside among the over 65 age group, with 8% take-up among women in this age group and 9% among men.

Declining rates of furlough among women is primarily driven by decreases in the number of jobs on furlough in sectors such as accommodation and food services. However, while furlough rates are declining in these sectors, over one-third (35%) of furloughed jobs in Scotland reside in female-dominated retail and hospitality. This creates a potentially negative outlook for women’s employment in these sectors.

The Scottish Government’s Programme for Government, published earlier this month, notes that the full impact of COVID-19 on employment will only become clear with the end of the Job Retention Scheme. Certainly, a number of factors makes it difficult to determine the impact the end of furlough will have on unemployment in Scotland:

Due to the lag in labour market data, the impact of the end of the scheme won’t be visible in labour market data until December. For now, what’s certain is a lack of certainty around the impacts the end of furlough will have on unemployment in Scotland.

The Scottish Government expects disproportionately negative employment outcomes for women, as well as young people, Black and minority ethnic (BME) people, lone parents and disabled people. This is particularly significant, as these groups already face structural barriers to employment and, as a result of their intersecting identities, BME women and disabled women will face particular barriers to good quality employment. Consequently, Scottish Government have concluded that activity to drive up good, secure and well-paid employment opportunities for those at greatest risk of poverty will have to be prioritised in the aftermath of the pandemic. To date, however, this rhetoric has not yet translated to effective action on women’s in-work poverty and job insecurity in Scotland.

This focus on job quality, as well as job numbers, is extremely welcome as women’s employment is increasingly precarious, and concentrated in low-paid work.

Research from the IFS found that the aforementioned surge in job vacancies has been driven entirely by low-paying occupations, in which new job openings are around 20% higher than pre-pandemic. As the IFS also concluded that competition for new job opportunities is higher for women than it is for men, a focus on good quality employment will be critical in preventing women being funnelled into low-paid employment.

Unemployment rates will undoubtedly be an important indicator of economic recovery. However, if we are to meet the ambition of building a fairer economy in the aftermath of the pandemic, we need to move beyond a narrow focus on employment rates alone and ensure that fair work for women is core to economic recovery. Following the 2008 financial crisis, employment rates masked a rise in low paid work, slow wage growth, as well as increasing precarity and job insecurity in the labour market. This also reduced Scotland’s gender pay gap, not because there was an increase in women’s pay, but rather there was a downward pressure on men’s pay.

Many of the sectors which account for a large proportion of female job losses over the crisis are notoriously low paid and characterised by job insecurity. For example, four in ten of those working in female-dominated retail and wholesale are paid less than the real Living Wage. In hospitality, also a majority female workforce, 80% of workers reported that they were already struggling with their finances before going into lockdown. A return to the status quo will merely cement women’s labour market inequality and in-work poverty.

While furlough has gone some way to protect employment and earnings for some women, key features of the Job Retention Scheme actually increased the likelihood of women leaving work in order to care, particularly at the start of the crisis. As a result of the failure to embed gender analysis in policymaking, the House of Commons’ Women and Equalities Committee concluded that the design of furlough “overlooked - and in some respects continues to overlook - the specific and well-understood labour market and caring inequalities faced by women.”

As furlough comes to an end and the impacts of the pandemic on employment become clear, we cannot afford for women’s labour market equality to continue to be an afterthought in policymaking. It’s time to put gender equality at the heart of fair work and to prioritise policies and interventions which tackle occupational segregation, women’s low pay and the continued undervaluation of women’s work.

Scottish Government’s forthcoming National Strategy on Economic Transformation is an opportunity to prioritise action on the structural issues which underpin women’s economic inequality. Close the Gap has advocated that a fairer and greener economy has to be an economy that also works for women.

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