Women, work and COVID-19: the stark implications for women’s poverty

Prior to the outbreak of COVID-19, poverty in Scotland was gendered. Women were more likely to be in poverty; more likely to experience in-work poverty; and were more likely to experience persistent poverty than men.

Women’s experience of poverty is directly linked to their experience of the labour market. That one of the key consequences of COVID-19 is labour market disruption and an expected ‘jobs recession’ is therefore particularly problematic for women’s poverty as women’s pre-existing inequality in the labour market puts them at particular risk of unemployment, reduced working hours and furlough.

Women account for the majority of workers in sectors categorised by the Scottish Government as being at ‘high exposure’ to labour market disruption. The high-risk sectors where women are concentrated are low-paid service sectors, putting low-paid women at particular risk. Women are four percentage points more likely to have lost their jobs than men and, women in low-paid cleaning and personal care services roles are more likely to have been made redundant. Job losses are only expected to rise, particularly if social distancing measures are further extended. Employers are also being asked to contribute more to the cost of furlough from August, which may bring a further wave of redundancies from businesses that are struggling to stay afloat.

Women who were already struggling are now under enormous financial pressure, being pushed into further and deeper poverty. Ultimately, without specific interventions to promote women’s equality and a gendered response to the crisis, COVID-19 will cement and potentially worsen the gendered nature of poverty in Scotland.

In line with the multiple labour market barriers experienced by different groups of women, coronavirus leaves particular groups of women at even greater risk of poverty. For example, women in the gig economy, 75% of whom earn less than the taxable threshold, do not have access to either of the Government financial schemes. BME women and migrant women are concentrated in low-paid service sectors which are susceptible to job disruption and redundancy. Migrant women with no recourse to public funds who have been made redundant, or had their hours cut, face destitution because they are not eligible for most benefits.

In the immediate sense, women’s earnings have been impacted by their increased likelihood of working in a sector that has been shut down. Young women and women on zero-hour contracts are over-represented in these sectors. One-third of lone parents work in shutdown sectors which is particularly concerning for child poverty rates as lone parents, 91% of whom are women, are already more likely to be living in poverty.

Many of the shutdown sectors where women are concentrated, such as retail and hospitality, are notoriously low paid and characterised by job insecurity. For example, four in ten of those working in retail and wholesale are paid less than the real Living Wage and 80% of people working in hospitality reported that they were already struggling with their finances before going into lockdown. Typical pay for workers in shutdown sectors is less than half that of workers in jobs that are able to be done from home. As these service sectors are less likely to ‘bounce back’ following the end of the crisis, as a result of changing consumer preferences and spending power, the impacts for women working in these sectors is unlikely to be fleeting.

Women in these low-paid, high-risk sectors are already more likely to be experiencing in-work poverty and are therefore less likely to have savings to fall back on. Women account for two-thirds of workers earning less than the living wage, and receiving only 80% of their usual salary through the Job Retention Scheme could push these women into poverty. For women who have had their hours reduced, the loss of earnings will have a profound impact on their financial security.

The extension of the Job Retention Scheme until October and the introduction of part-time furlough from August will provide some protection of earnings. Part-time furlough has been a key policy ask of Close the Gap and Engender, as this is particularly important for women who are balancing work and increased caring responsibilities. Further detail surrounding these announcements is not expected until May and, as ever, that detail is crucial. In particular, more information is required around part-time furlough and how women will be supported to return to work, when they may be unable to access childcare.

The delay in the delivery of the increased funded entitlement for childcare also raises concerns around women’s poverty in the longer term, particularly as there is no clarity around the length of the delay. The lack of flexible and affordable childcare is a key barrier for women entering the labour market or increasing their hours. 25% of parents living in absolute poverty in Scotland have given up work and a third have turned down a job because of the high cost of childcare. Delays in the provision of the funded entitlement could trap women in low-paid part-time work, or prevent women from re-entering the labour market, adding to a growing child poverty crisis.

The extension of school closures is likely to push many women to breaking point in balancing childcare responsibilities and paid work. Women in casualised and precarious work face difficulties reconciling variable hours with caring responsibilities, and low-paid women are less likely to be able to work from home in order to care for children during the crisis. These issues, coupled by low awareness among employers of the furlough provision for employees with caring responsibilities, may lead to women having to take unpaid leave in order to care, further jeopardising their earnings.

The transformation of Scotland’s economic landscape as a result of COVID-19 will have far-reaching implications for women in the labour market. One of the key consequences will be a rising tide of poverty for women, and the key concern is how to respond to this trend. Transformational and ambitious policy responses are essential.

Many women may find that their furloughed salary means that their earnings are below the Universal Credit threshold and others will be forced into accessing social security as a result of being made redundant. The current crisis has highlighted the failings of Universal Credit in particularly stark terms. Women require a lifeline, but the design of social security does not meet their needs, and traps women in poverty.

COVID-19 has made it even more pivotal that the Scottish Government prioritise action to tackle women’s in-work poverty when trying to meet their child poverty targets. Despite the established link between women’s poverty and child poverty, analysis and action on child poverty largely ignores the fact it is increasingly impossible to tackle child poverty without tackling women’s inequality in the labour market.

Austerity in the aftermath of the 2008 financial crisis had massive implications for women’s equality, disproportionately hitting women’s incomes and destroying the social security safety net. Further and deeper austerity is an entirely inappropriate response to this crisis, having potentially devastating consequences for women’s poverty and child poverty.

The UK and Scottish Governments must not enact a recovery that facilitates a return to the status quo, cementing women’s poverty in the process. Economic recovery needs to focus on rebuilding and transforming the economy to further gender equality and tackle pre-existing inequalities. The idea of building back better must mean building a labour market and social security system that works for women.