New polling, published Monday 1st February by the TUC, finds that low earners are more likely than middle and higher earners to have been forced to cut spending and take on debt during the pandemic.
The poll findings (conducted by BritainThinks) come as the TUC calls on the Chancellor to improve pandemic support for low- paid workers, and to invest in job protection and creation to prevent an unemployment crisis.
Low paid workers and the pandemic’s impacts
Over a third (37%) of workers said that their household had suffered a reduction in disposable income since the pandemic began.
This rises to half (50%) for workers with annual earnings below £15k, while it is just three in ten (29%) for workers earning more than £50k.
The lowest earners are also the most likely to have had to reduce spending and take on debt.
The TUC says that low-paid workers have been worse affected because:
- Insecure work: Low paid workers are often employed on terms such as zero-hours contracts, which give them no protection when their hours of work are cut back.
- Household budget flexibility: Workers who are already struggling on low pay have much less flexibility than middle and higher earners to reduce spending and avoid debt.
- Hard-hit sectors: Hospitality, leisure and non-essential retail have had by far the highest rates of furlough, and they are both sectors with large numbers of low-paid workers.
- Remote working: Middle and high wage earners are more likely to have jobs that can be done form home, meaning they can avoid the need to be furloughed and may also make savings such as their usual commuting costs.
- Furlough is protecting incomes but can pay less than minimum wage: The job retention scheme does not have a floor, meaning that some workers receiving 80% of their wages have fallen below the minimum wage. Two million employees were paid below the minimum wage in April 2020 (compared to 409,000 in April 2019) and the majority of these were on furlough at the time.