Low Paid Workers Bearing Brunt of the Covid-19 Crisis

13 July 2020

New research by the Institute for Employment Studies (IES), funded by Standard Life Foundation, has found that low paid workers are bearing the brunt of the Covid-19 crisis.

The analysis provides the first detailed assessment of official Labour Force Survey data for the post-crisis period.  It finds that:

  • Employment has already fallen significantly for those in low paid jobs – down by four percentage points between February and April, which is equivalent to a fall of 140 thousand.  Employment for those in higher paying jobs however is unchanged between February and April.  This fall is in spite of the measures put in place to protect jobs (the Job Retention Scheme and Self-Employment Income Support Scheme), suggesting that there is a sizeable group of low income workers missing out on support.
  • The drop in employment likely reflects both the occupations that low paid workers are in, but also their often more precarious employment conditions – with the research finding that low paid workers are two thirds more likely to be in temporary work, three times more likely to be part-time, and nearly five times more likely to be on zero hours contracts than higher paid workers.
  • Low paid workers are significantly more likely to report having been temporarily laid off or had their hours reduced due to the crisis – with two fifths of those working fewer hours in April reporting that this is due to the economy (compared with one third for higher paid workers).
  • One in eleven low paid workers are looking for a new or additional job – double the rate for those in higher paid jobs, and equivalent to 400 thousand low paid workers looking for new work.

Commenting on the findings, IES Director Tony Wilson said:

“This analysis suggests that many low paid workers may have already slipped through the cracks during the crisis – with employment falling significantly during April, while it held up for other groups.  This reflects the often precarious nature of low paid work – with workers two thirds more likely to be in temporary work and nearly five times more likely to be on zero hours contracts than the higher paid.  So while the government’s plan for jobs is welcome, it needs also to address job security and precarious work.  And with nearly one in ten low paid workers looking for a new job, we must ensure that those in work are getting the help they need to find a better job.”

Mubin Haq, Chief Executive of the Standard Life Foundation, said:

"The job protection measures brought in by the Chancellor were far-reaching and helped millions. But those on the lowest pay, and most likely with the least resources to fall back on, appear to have been the ones to have been least protected. This trend is likely to continue as redundancies mount up with low-paid sectors such as hospitality and retail being particularly affected. The recent summer statement from the Chancellor is unlikely to stem further job losses. An improved safety net is needed for those made unemployed and a continued drive to promote decent standards at work."

Download the report