Challenge Poverty Week: What COVID-19 means for young women’s in-work poverty

One of the themes of this year’s Challenge Poverty Week is work and jobs, with the key message that tackling poverty requires investment in decent work. This is particularly important for women, as women’s experience of the labour market is directly linked to their higher rates of poverty. This means women’s concentration in low-paid, undervalued work is a key cause of women’s increased likelihood of experiencing in-work and persistent poverty.

This year, these issues are more pertinent than ever with COVID-19 job disruption having a disproportionate impact on low-paid women, Black and minority ethnic women and young women’s employment. This is particularly significant as these groups of women were already more likely to be experiencing in-work poverty prior to the crisis. COVID-19 has therefore placed these women, and their children, at even greater risk of poverty, adding to a growing child poverty crisis.

Evidence from previous economic crises also indicates that economic downturns tend to have particularly detrimental effects on younger workers. Certainly, the economic and labour market consequences of COVID-19 have had a disproportionate impact on young women’s employment and financial wellbeing, with these trends only likely to worsen over the course of the crisis.

Close the Gap’s Disproportionate Disruption analysis highlights that, because of occupational segregation, young women are more likely to work in a shutdown sector such as hospitality and retail; younger women are at particular risk of furlough; women in low-paid jobs will be particularly affected by job disruption, placing them at greater risk of poverty; and, as per previous recessions, younger women are more likely to lose their job.

Data shows that young women are more likely to have been furloughed, with 65% of female employees aged 17 being furloughed. 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. The high rate of furlough among young women also puts them at greater risk of redundancy when the Job Retention Scheme comes to an end this month. Indeed, a quarter of pubs and restaurants have said they will not survive the winter.

The risk of redundancy is heightened by the limitations of the Job Support Scheme which is less generous than the previous scheme and also stipulates that jobs have to be ‘viable’. While viability in this context is yet to be defined by the UK Government, this will likely have implications for jobs in businesses and sectors that remain shutdown, or most impacted by social distancing. Close the Gap is also concerned that part-time workers, of whom women account for the majority, will be disproportionately negatively impacted by the new scheme. Retaining two part-time workers is ultimately more costly than retaining one full-time worker on the scheme. The Job Support Scheme arguably disincentivises employers paying low-paid workers in low-skilled jobs for hours they aren’t working. This could lead to moreredundancies among low-paid workers, particularly as recruitment and training costs are lower in the sectors hardest hit by the pandemic, including retail and hospitality.

Women, particularly lone parents, have also been disproportionately affected by the need for more unpaid care, impacting their ability to do paid work. Women in the gig economy have been ineligible for either of the UK Government’s financial support schemes and women in casualised and precarious work face difficulties reconciling variable hours with caring responsibilities. As a consequence, women are leaving the labour market in order to care, or because they feel unsafe, with obvious implications for women’s earnings. In the longer-term, being out of work has scarring effect for women’s financial stability and career prospects.

This is the exacerbation of an existing trend. Prior to the outbreak of COVID-19, young women were concentrated in low-paid, precarious work and were already more likely to be experiencing poverty. Women who were already struggling are now under enormous financial pressure with COVID-19 creating a perfect storm for a rising tide of poverty among young women.

Many of the sectors where young women are concentrated, such as retail and hospitality, which are those which have been affected by shut downs and physical distancing measures, 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. Young women in these low-paid, high-risk sectors were already more likely to be experiencing in-work poverty and are therefore less likely to have savings to fall back on. For women who have had their hours reduced, the loss of earnings will have a profound impact on their financial security.

The automation of work in retail and hospitality jobs is already evident, and as these sectors are less likely to bounce back following the end of the crisis, the impacts for young women workers in these sectors will be long-lasting.

Young women need targeted support to enable them to re-enter the labour market and to secure good quality, sustainable employment. However, despite the well-evidenced impacts of COVID-19 on young women’s employment, we continue to see gender-blind response measures that further entrench young women’s poverty.

One of the policy asks for Challenge Poverty Week relates to the scope of the Scottish Young Person’s Guarantee. Certainly, the design of the guarantee is vitally important in determining if the scheme will benefit both young women and young men. Without a gendered approach, which recognises the barriers young women face in the labour market, the Scottish Young Person’s Guarantee will entrench occupational segregation, exacerbate women’s poverty and widen the gender pay gap.

Evidence highlights that generic employability and skills programmes reinforce women’s labour market inequality. The Young Person’s Guarantee must therefore challenge occupational segregation by design so as not to funnel young women into low-paid, female-dominated work which will merely reinforce their higher rates of poverty. The payment of the real living wage for all participants is also critical to addressing women’s higher rates of in-work poverty, and tackling the disproportionate risk of poverty among young mothers.

Flexibility, including offering jobs on a part-time basis, is vitally important to enable women with caring responsibilities to access the scheme. Young mothers are a priority group within the Scottish Government’s Economic Implementation Plan and identified as being at particular risk of poverty in the Government’s Child Poverty Delivery Plan. The Delivery Plan notes that young women with caring responsibilities face a range of barriers to accessing quality employment; to staying in work; and progressing within employment, leading to their concentration in low-paid jobs and sectors. Unless the job guarantee actively challenges occupational segregation by design and embeds flexibility within the scheme, it is likely that the guarantee will reinforce young women with caring responsibilities concentration in low-paid jobs and sectors, potentially trapping women and their children in poverty.

In addition to the substantial impact on young women’s employment and career prospects, recent evidence has also highlighted that young women are bearing the brunt of the UK’s second wave of coronavirus infections. Analysis of hospital records suggest that younger women are now more exposed to the virus, with a substantial rise in the number of women aged 20-40 admitted for serious coronavirus infections since August. This rise is driven by younger women being more likely to be in jobs that leave them vulnerable to infection, including work in pubs, cafes, shops, and the care sector.

Addressing the inequalities women face at work must be a core aim of economic recovery measures, with a particular focus on young women. Recovery must focus on transformational change to mitigate the impacts of COVID-19 and advance women’s equality.

A key message of Challenge Poverty Week is that we can work together to redesign our economy so that it works for everyone. As highlighted in Gender and Economic Recovery, jointly published by Close the Gap and Engender, new approaches to our economy are essential if we are to tackle women’s poverty and persistent inequality in the labour market. Putting care and solidarity at the heart of our economy can build an economy that works for women, as well as men, and will create better jobs, better decision-making and a more adequate standard of living for us all.