Covid-19 and the low paid: Early analysis of Labour Force Survey

Papoutsaki D, Wilson T |   | Institute for Employment Studies  | Jul 2020

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This briefing note sets out early analysis of the impacts of the Covid-19 pandemic on low paid employees, drawing on detailed analysis of Labour Force Survey (LFS) responses for the month of April. The work has been funded by the Standard Life Foundation, as part of a new project exploring the employment and financial impacts of the pandemic on low-income working households.

So far, the headline Labour Force Survey measures are showing very little impact of the pandemic on the labour market. However, this more detailed analysis finds that the crisis is so far having far greater impacts on low paid workers than on others. It shows that:

■    Those in low paid jobs are more likely to be women, to be young, to be black or from a minority ethnic group, to be under-employed and/ or to have lower qualifications.  So those in low paid work are already disadvantaged in the labour market compared to higher paid workers.

■    Employment has fallen significantly already for those in low paid jobs – down by four percentage points between February and April, from 82 to 78% – equivalent to a fall of 140 thousand. Meanwhile employment is unchanged for those in higher paying jobs. This suggests that there is a sizable group of people, in previously low paying work, who have not been protected by the Job Retention Scheme or Self-Employment Income Support and are now out of work.

■    This likely reflects both the occupations that low paid workers are in, but also their often more precarious employment conditions – with low paid workers 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.

■    Those in lower paying jobs are twice as likely to report that they are ‘away’ from work (but still employed) and report a greater reduction in usual hours of work than those in higher paying jobs.

■    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 seeking other work.

Looking ahead, these findings reiterate the importance of focusing on how we support those in lower paid work during the crisis and in the recovery, and in particular to address the quality and security of low paid work, support in work, and help to find new work where this is sought.

The next stages of this project will interview workers in low paying occupations, so as to explore in more depth the impacts of the crisis and how public policy and employers can respond.

* This briefing was amended on 14 July to correct an error in Figures 5 and 7 and make minor drafting clarifications.