Spring Budget 2023: Women and employment

While employment levels have started to recover, households in the UK are experiencing their sharpest decline in living standards since records began in the 1940s, and many women returning to the labour market are finding themselves in increasingly precarious forms of work. Inflationary pressures are eroding earnings growth and those on the lowest incomes – the majority of whom are women – are hit hardest by this cost of living squeeze.

During the pandemic, the female employment rate fell back to 71.4% but it has now largely recovered to reach 72.3% in the fourth quarter of 2022. By contrast, the male employment rate exceeds the pre-pandemic rate, sitting at 79% in Q4 2022.

‘Black, Asian and Minority Ethnic (BAME) women were disproportionately impacted by the pandemic and, in 2022, the unemployment rate of minority ethnic women remains more than double the rate of women from a White ethnic background.’

However, we remain wary of headline figures pointing to increased employment as they too often mask several groups that are being left behind in the recovery, including older women who have seen significant increases in rates of economic inactivity, a phenomenon driven by long-term sickness and early retirement. Additionally, women make up the majority of those in insecure and precarious forms of work, including on zero-hours contracts and in self-employment. Such workers may find themselves in low weekly pay, even as the National Living Wage rises, due to low hours of work.

The most recent official ONS data from April 2022 estimates the gender pay gap for full-time employees to be 8.3%. For all employees, the estimate rises to 15.4%, reflecting the greater proportion of women in part-time work, which typically pays less per hour.  Women are more likely to be low earners (low pay is defined by the ONS to be below two-thirds of hourly median wages) than men, with 1.7 million women classified as such compared to 1.16 million men. Against this backdrop, the rise in the National Living Wage (NLW) announced in the 2022 Autumn Budget was welcome, as is the continued ambition for the National Living Wage to reach two-thirds of the median wage by 2024.

Prior to the pandemic, women made up just over two-thirds of all public sector employees and 9 out of 10 part-time public sector employees. This made them particularly vulnerable to public sector pay freezes and spending cuts.

The Women’s Budget Group is calling for: public sector pay to keep pace with inflation; a requirement for companies to produce plans to tackle their reported gender pay gaps; new duties to report on pay gaps affecting other protected characteristics such as ethnicity and disability; using the Employment Bill, currently before the House of Commons, to reduce insecurity for low-paid workers by extending employment rights and investing in strong and effective enforcement.

Read and download the full briefing here.