Dr Hanna Szymborska asks what does Sunak’s labour market policy mean for women?
Ever since the first national lockdown was imposed in March 2020, rising unemployment has been one of the most prominent and long-lasting features of the Covid recession. While the official unemployment rate remains low compared to a decade ago, unemployment is likely to rise further as the long-term consequences for the economy and society of the pandemic continue to unfold over the coming months and years.
Labour market outcomes have been markedly worse for women. Losses in employment and earnings have been disproportionately larger for female workers. Women are also estimated to be 96% more likely to have lost a job because of the Covid pandemic compared to men, which can be partly explained by women’s employment being concentrated in sectors that are disproportionately affected by the pandemic. Moreover, a greater proportion of women who were employed before the pandemic (in February) are no longer working or have lost hours of work due to Covid, compared to men employed in the same pefiod .
These unequal patterns in employment and earnings losses carry devastating implications for the wellbeing of women, families, and future generations. Long spells of unemployment are known to have a lasting negative influence on a person’s finances and undermine the likelihood of finding a better job in the future.
“Labour market policy needs urgent scrutiny to ensure an inclusive recovery from the Covid crisis.”
It is vital that policy responses to the crisis explicitly consider measures to ensure that the recovery is inclusive. Yet such commitment is largely missing from the current policy strategies to deal with the Covid crisis in the UK.
The current furlough scheme provides a temporary solution to the Covid unemployment crisis because it doesn’t do enough to generate new employment opportunities. It has been shown that not all workers have been able to get equal access to the Job Retention Scheme (JRS) – commonly referred to as the furlough scheme – that was first introduced by Chancellor Rishi Sunak in March 2020. For instance, proportionately fewer women have been furloughed compared to men.
The future UK’s labour market policy needs urgent scrutiny to ensure an inclusive recovery from the Covid crisis. The Chancellor’s Job Support Scheme (JSS), which was supposed to replace the JRS in November 2020, provides an insight into the type of policies that might be put in place in spring 2021. It has been recognised that the initial proposal for the JSS has not been generous enough to deter layoffs. What’s more, similarly to the JRS, no explicit measures were put in place to ensure a gender equal recovery in the labour market.
“Women are more likely to work in the NHS and the healthcare sector compared to men.”
But it is not only Sunak’s jobs scheme that poses problems for building back a better and more inclusive economy after the pandemic. Broader plans of the government to focus economic recovery on investment in physical infrastructure risk exacerbating gender inequality by prioritising employment growth for men over women. This bias away from investment in public services, including education, social care, and social housing undermine sectors where women make up a greater part of the workforce.
A much more radical shift is needed in labour market policy and government spending to protect existing jobs and stimulate inclusive employment growth in the near future.
Firstly, an explicit job guarantee scheme is desperately needed to mitigate the negative effects of prolonged unemployment. This has been advocated as an effective way of supporting incomes and promoting economic growth, not only in the immediate aftermath of the pandemic, but also in the longer term. Importantly, a job guarantee programme has the potential to align the pathway of economic recovery with broader goals of social justice and gender equality. But this requires the government to take a more proactive role in prioritising investment in sectors that actively promote a more equal distribution of income and wealth and more environmentally sustainable business practices.
“The economic strategy of the government neglects the gains from investing in social infrastructure.”
The government should also develop a long-term strategy to ensure sustained real pay growth and a better social safety net for key workers, many of whom are women. Despite their essential status, it is widely recognised that key workers represent a group whose earnings have been substantially undervalued, particularly in the context of increased work intensity and health risks during the pandemic. And women are more likely to work in the NHS and the healthcare sector compared to men. Given that women are estimated to undertake on average 60% more unpaid work than men, an additional demand emerges to ensure adequate state support for care responsibilities in the light of increased working hours during the pandemic.
Successful implementation of these proposals necessitates greater public investment in social infrastructure. Social infrastructure can be broadly defined as economic activity centred on providing care to society. It has been argued this includes not only the social care sector but also public education, healthcare, childcare, and social housing.
And investing in social infrastructure yields proportionately higher increases in employment and output than similar investments in physical infrastructure. This is because better social infrastructure improves human capabilities, which generates positive spill overs into other sectors in the economy.
“As others have pointed out, policies embedded in slogans such as “Build, Build, Build” or “Eat Out to Help Out” do not tackle the structural flaws of our economic system, which have only been magnified by the Covid pandemic.”
Unfortunately, the economic strategy of the government neglects the gains from investing in social infrastructure. Despite record high levels of public debt, public spending efforts have largely been directed into projects that are likely to have very limited and mostly short-term effects on the economy. As others have pointed out, policies embedded in slogans such as “Build, Build, Build” or “Eat Out to Help Out” do not tackle the structural flaws of our economic system, which have only been magnified by the Covid pandemic.
To ensure that economic recovery is gender equal, it is crucial that the government rejects any form of austerity once the current recession is over. Austerity over the past decade has weakened the capacity of the healthcare and social care sectors in the UK on the eve of the pandemic. Austerity has also had a disproportionately negative impact on women, who not only use public services more than men, but who also constitute the majority of welfare benefits recipients as well as workers in the public sector.
In sum, the current policy strategy to revive employment and economic growth does little to address the long-term structural challenges faced by the British society. Without a radical change in the government’s attitudes towards the role of public spending in job creation and social infrastructure, it is likely that gender disparities will become exacerbated in the long term. This will further undermine economic recovery and the prospects of building back a better and more resilient economy in the years to come.