Understanding the position of women in the UK labour market

Graham Whitham Inequality, Living wage

Graham Whitham, Senior Policy Advisor on UK Poverty and Inequality, introduces to some of the key findings of the recent report, Women, work and wages and the UK.

The labour market position of women in the UK has been generally improving, with higher employment rates and increases in earnings. However, on these measures, women still fare worse in the job market; the formal employment rate for women is lower and female weekly earnings are still less than 70% of male weekly earnings. There continue to be significant barriers to women’s entry into the workforce and, most importantly, into well paid, secure, high quality jobs.

Analysis carried out by New Policy Institute on behalf of Oxfam assembles some of the key trends in earnings and employment for women in order to assess how much progress has been made and to what extent women are becoming more or less disadvantaged. It considers some of the longstanding challenges facing women in the labour market against the headline indicators of employment rates and pay, as well as some of those areas that have been the subject of much labour market discourse in the UK since the financial crash of 2008 – such as underemployment and insecurity of employment.

The analysis finds that:

  • Working-age female employment rates have risen by 6 percentage points to 69% since 1995, and weekly earnings growth has been stronger for women than for men, but the formal employment rate for women remains lower and female weekly earnings are still less than 70% of male weekly earnings.
  • Women are more likely than men to be low paid, with low pay rates for 25% of employed women compared to 15% of employed men. There are 3.1 million low paid women: 62% of all low paid employees.
  • Women with low or no qualifications have much lower employment levels than men with an equivalent background.
  • The employment rate for mothers in couples is 20% lower than for fathers. Single mothers also have a lower employment rate than single fathers.
  • There has been a growth in self-employment for women which is now up to one in ten working women. A majority of these (54%) are part-time, in contrast to 13% of self-employed men.
  •  Over half of workers on zero-hours contracts are female – 350,000 women or 2.7% of the female workforce.
Negative developments in the labour market disproportionately affect women

These findings suggest that longstanding challenges in respect of female pay and employment rates remain. Progress in these areas is too slow. Some of the recent negative developments in the labour market disproportionately affect women and there is therefore a strong case for a greater focus on improving the position of women in the labour market within labour market/economic policy.

There is a strong case for focusing on women’s employment as a means of tackling poverty and boosting living standards. Women’s poverty matters because of the effect it has on women themselves but also on their wider family. Women’s and children’s poverty is inextricably linked and in low income families, it is often women who act as managers of family finances, shielding their children from the worst effects of poverty.   Just as the increase in female employment from the late 1960s and in the years up to the financial crash of 2008 helped boost living standards, future improvements in the position of women in the jobs market, particularly towards the bottom of the labour market, will have a significant effect on future living standards in the UK.

Addressing gender inequalities at work would also reap wider economic benefits. The gender pay gap has a significant impact on the UK economy, contributing to the loss of between £15 and £23 billion of GDP every year.

In order to improve the position of women in the labour market, policy responses are needed across a range of areas including pay, skills and progression, employment support, social security (including a focus on boosting work incentives), workers’ rights and protections, and job design and the promotion of ‘decent work’.

Further reading:

Alexia Pretari