Throughout the pandemic, lower-paid workers have seen their household finances hit harder, have been more likely to face job losses, more likely to get nothing when off sick, and much less likely to be able to work from home. Most concerningly, workers in lower paid occupations have been more likely than those in better paid jobs to die from the virus.
The pandemic has clearly highlighted and exacerbated the class divides already present in the labour market. We need an urgent economic reset to tackle this divide.
Job losses and pay
Low-paid industries have been hit hardest by job losses during the pandemic. So many low-paid workers lost their jobs during the pandemic that it skewed official pay data.
The three industries where the number of employees remains furthest below pre-pandemic levels – arts and entertainment, hospitality and ‘other services’ – are all industries where pay is lower than the median for all employees.
These are also three industries with relatively high furlough rates according to HMRC stats, meaning that the end of furlough poses a serious threat to low-paid jobs in these industries. Combined with the Universal Credit cut, this will be a hammer blow for low-paid workers and push many further into hardship.
Low-paid furloughed workers were the most likely not to have their pay topped up while on furlough. While furlough protected the jobs of millions of workers, the failure to build in a protection to stop furloughed workers being paid less than the minimum wage heavily contributed to over two million people not being paid the legal minimum wage in April 2020.
Low-paid workers are also worried about future pay. New TUC polling, conducted by Britain Thinks, has found that high earners (those earnings £50k per year and above) are more than three times likely than low-paid workers (those paid below £15k per year) to expect to receive a pay rise in the next 12 months (37 per cent compared to 12 per cent).
Low-paid workers are also more likely to have their finances hit and less likely than higher earners to have saved during the pandemic. Low-paid workers are almost twice as likely as high-paid workers to say they have cut back on spending since the pandemic began (28 per cent compared to 16 per cent). And high earners are twice as likely than low-paid workers to have increased their savings in the past 12 months (46 per cent compared to 23 per cent).
Decent sick pay for all
This class divide extends far beyond personal finances. The polling also shows how low-paid workers are markedly more likely to get low or no sick pay compared to higher earners.
Low-paid workers are four times more likely than high-paid workers to say they can’t afford to take time off work when sick (24 per cent compared to six per cent). Only a third (35 per cent) of low-paid workers say they get full pay when off sick compared to an overwhelming majority of high-paid workers (80 per cent).
Statutory sick pay is a meagre £96.35 per week. This is the least generous mandatory paid sick leave of any OECD country, and even this is only available to employees who earn £120 per week or more.
We’ve been calling for statutory sick pay to be increased the equivalent of a real living wage since last March, as well as being made to available to all. Instead, the government introduced self-isolation support payments for low-paid workers – an inadequate short-term fix that has barely helped and that barely anyone’s heard of.
Working from home
The impacts of a lack of decent sick pay for low-paid workers has been exacerbated by the fact that low paid workers are much less likely to be able to work from home.
Three-quarters (74 per cent) of low-paid workers can only work outside the home. This compares to just 20 per cent of high earners.
This speaks to a wider concern about access to flexible working for all workers. Restrictions during the pandemic meant that many workers, but not the majority, worked from home at some point. This has led to much discussion around flexible working being dominated by working from home, leaving out the majority of workers for who this has never been an option (many of who are low-paid).
In contrast, too many workers in low-paid occupations are closed out of genuine flexibility and instead have worse terms and conditions masquerading as ‘flexibility’ forced onto them in the form of zero-hours contracts and other forms of insecurity.
We cannot allow genuine flexible working to become a perk for the favoured few - offered to a minority of the workforce who are able to work from home – and serving to reinforce existing inequalities.
Most damningly, low-paid workers are more likely to die from the virus. ONS data on Covid-19 mortality rates by occupation shows that those occupations with the highest mortality rates are also paid lower than the median across all occupations. Covid-19 mortality rates by occupation are published separately for men and women, but this trend is true for both.
An urgent economic reset
The pandemic has highlighted and entrenched the stark class inequalities that already existed in our labour market. The country needs an urgent economic reset.
In the short term, the government must extend the furlough scheme for as long as its needed, and put in place a permanent short-time working scheme to protect workers at times of economic change. The planned £20 cut to Universal Credit must also be cancelled.
More support is needed for those who are struggling. This must include a fully funded freeze on council tax debt repayment, support for renters, and an increase to the short-term hardship funding provided to councils while also establishing a permanent fund that provides a source of grants. Ideas such as cancelling council tax debt and providing the outstanding money to councils should also be explored.
But we also need bigger changes going forward.
We know that the best way to win workers better pay and conditions is through their union. That’s why we’re campaigning for better rights for unions to access workplaces, and stronger collective bargaining rights to get workers the pay and conditions they deserve.
That must be accompanied by a strong floor of rights. We need decent sick pay now, equivalent to the real living wage, and available to all workers. We need a minimum wage of at least £10 to ensure that every worker is being paid enough to live on.
And government can improve access to genuine flexible working by banning zero-hours contracts and introducing a duty on employers to publish flexible working options in job adverts and give workers the right to take up the advertised flexibility from day one. The government’s long delayed employment bill should have been an opportunity to introduce these changes. Action is required now to stop the class divide exposed by the pandemic from widening still further.
Want to hear about our latest news and blogs?
Sign up now to get it straight to your inbox
To access the admin area, you will need to setup two-factor authentication (TFA).