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Employment falling for the low paid while it has increased in high skilled jobs. Urgent action needed to protect incomes, increase employment and support decent work @EmploymtStudies

New analysis by the Institute for Employment Studies has found that low paid workers are more than twice as likely to have lost their jobs during the pandemic and are at far greater risk of being temporarily laid off or having their hours cut.

The research, funded by Standard Life Foundation, concludes that in this current lockdown it is likely that around two thirds of low paid workers – or four million people – are either temporarily laid off or working fewer hours than normal.  This would be double the rate of work disruption for staff who are not low paid.

Employment loss in this crisis has been driven by falls in a range of lower-paying jobs – in particular food services and manufacturing, hospitality, residential care and construction; but at the same time employment has risen in higher-paid work (driven by public services, technology and finance).  So these unequal impacts risk driving growing polarisation in the labour market and widening inequalities.

The report also includes findings from in depth research with forty low paid workers after the first lockdown and a series of roundtables in the autumn with organisations working with and researching low pay.  These found that while emergency support measures like the furlough scheme and increases in Universal Credit have helped cushion the impacts of this crisis, many of those in low pay have slipped through the cracks. 

In a range of cases, low paid workers reported being denied furlough, having their hours cut, being expected to work without adequate protection, and seeing their living costs increase while their incomes fell.

Commenting on the report, Tony Wilson, Director of the Institute for Employment Studies, said:

“This crisis has already taken a significant toll on jobs and incomes, with low paid workers bearing the brunt.  With unemployment set to rise sharply this year we are likely still in the foothills of the employment crisis, but we can take action now and at the budget to address this.  Now is not the time to be cutting Universal Credit or cutting back on employment protections.  In fact we need to do more to support low-income households, reform sick pay and ensure that workplace rights can be properly enforced.  Looking further ahead, we need to plan now for the recovery and ensure that we put full employment and decent work is at the heart of it.”

Mubin Haq, Chief Executive of the Standard Life Foundation, said:

“This report provides further evidence of the pandemic’s severe impact on the low-paid. Lost jobs, reduced hours, insecure work, meagre sick pay. We have seen some progress but culture and practice remains poor in too many places. More action on incomes, protecting rights and employment support is needed if we are to ease the financial pain and insecurity many families are facing.”

The report calls for action to better support low paid workers as the pandemic continues, and to support full employment and decent jobs in the recovery. In particular it calls for government to:

  • Extend ‘flexible furlough’ through to Autumn to provide income support for those whose work continues to be disrupted while social restrictions remain in place.
  • Maintain the £20 uplift in Universal Credit; and temporarily suspend the benefit cap this year – which will increasingly penalise those who have lost work during the pandemic and cannot move home.
  • Reduce or remove the means test in the £500 Test and Trace Support Payment – so that no-one with symptoms or who need to self-isolate is forced to choose between staying in work or staying at home.
  • Reform Statutory Sick Pay – increasing this to at least £200 a week, while re-introducing the previous reimbursement scheme for smaller employers.
  • Invest the remaining £2 billion from the National Skills Fund to support those on low incomes to get the skills and employment support that they need to move into growing jobs and sectors.
  • Improve protection for insecure workers – by fully implementing the Taylor Review and ensuring that the new Single Enforcement Body is well resourced.
  • Establish ‘Good Work Partnerships’ – so that employers, social partners and local and national government can work together to support good work.

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