Low-income workers have borne the brunt of the pandemic, union warns

Employers urged to consider how they can tackle in-work poverty, as experts highlight that creating ‘good jobs’ can boost commitment and performance

The coronavirus crisis has been “a tale of two pandemics”, a union has warned, with low-income workers bearing the brunt both financially and socially.

A poll of 2,134 workers in England and Wales, conducted by BritainThinks on behalf of the TUC, found that workers earning less than £15,000 were almost twice as likely as those earning more than £50,000 to say they have cut back on spending since the pandemic began (28 per cent compared to 16 per cent).

Low-paid workers were also four times more likely than high-paid workers to say they could not afford to take time off work when sick (24 per cent compared to six per cent), while only a third of low-paid workers said they get full pay when off sick compared to four in five high-paid workers.

Similarly, high earners were over three times more likely than low-paid workers to expect to receive a pay rise in the next 12 months (37 per cent compared to 12 per cent). 

The analysis by the TUC also suggested that industries more likely to be lower paid were the ones furthest away from recovery.

These sectors, which included arts and entertainment and accommodation and food, also had little or no option to work from home, no or low sick pay and reduced living standards, while better-off workers have enjoyed greater flexibility with work, financial stability and increased spending power.

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Frances O’Grady, general secretary of the TUC, described it as “a tale of two pandemics”. “This Covid class divide has seen low-paid workers bear the brunt of the pandemic, while the better off have enjoyed greater financial security, often getting richer.”

Commenting on the findings, Charles Cotton, senior performance and reward adviser at the CIPD, encouraged employers to look at how they could tackle in-work poverty.

“This includes creating a financial wellbeing policy that includes paying a fair and liveable wage, offering perks that aim to promote and protect the financial situation of low-waged workers, and providing training and career development opportunities focused on helping low earners progress their earnings potential,” he said

“By creating good jobs, work and pay, as well as encouraging more openness about money concerns, our profession has the potential to improve both workforce commitment and performance,” Cotton added.

Nicola Inge, employment and skills director at Business in the Community, added that it has never been more important for employers to invest in their workforce. “It starts with paying a fair and living wage, but employers should also be considering how they can support employees through benefits such as rent deposit loans, discount schemes and signposting to financial advice services” she said.

Inge said it was also equally important for employers to invest in upskilling people at every level of their workforce, and to be more inclusive in their recruitment practice “to ensure that no one is left behind”. 

Simon Kelleher, head of policy and influencing at Working Families, said there had been a “significant increase” in the number of working parents and carers contacting the charity over the past 18 months to talk about income support and other in-work benefits.

There had also been an uptick in the number of parents who have had to take unpaid leave or reduce their hours to manage caring commitments, he said, and urged employers to offer staff “living hours” as well as the living wage to help lessen “economic disparities that have been exacerbated by the Covid-19 pandemic”.

“Contracts that reflect the regular hours they work could make a world of difference to workers who lack the certainty and job security of employees,” he said.

The TUC is calling on the government to extend the furlough scheme for as long as is needed to protect jobs and livelihoods and avoid a “hammer blow for low-paid workers” that will “push many further into hardship”.

It has also called on the government to reverse its decision to cut Universal Credit by £20 a week from next month.