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Low paid workers ‘twice as likely’ to have lost jobs during the pandemic

Researchers from the Institute for Employment Studies said urgent action was needed to protect incomes, increase employment and support decent work

Low paid workers are more than twice as likely to have lost their jobs during the pandemic and could be at greater risk of being temporarily laid off or having their hours cut, according to a new report. 

Independent research centre the Institute for Employment Studies claimed people on low incomes had “slipped through the cracks” and been disproportionately impacted by the Covid-19 jobs crisis compared to those on higher salaries. 

While emergency support measures including the furlough scheme and £20 uplift to Universal Credit might have helped “cushion” the impact, the institute said many on low pay were still “bearing the brunt”.

As many as four million workers were likely to be working less than usual in the current lockdown alone, they added. 

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Tony Wilson, director at the Institute of Employment Studies, said the pandemic had taken a “significant toll” on jobs and incomes, requiring urgent action to address the employment crisis. 

“Now is not the time to be cutting Universal Credit or cutting back on employment protections,” he said. 

“In fact we need to do more to support low-income households, reform sick pay and ensure that workplace rights can be properly enforced. Looking further ahead, we need to plan now for the recovery and ensure that we put full employment and decent work is at the heart of it.” 

A total of 2.6 million people are expected to be out of work by the middle of 2021, according to Chancellor Rishi Sunak’s Spending Review forecast. 

The furlough scheme, which allows employers to place workers on leave and continue paying them, has been extended until April, but many have already been made redundant. 

The latest figures show the number of “payroll” employees has fallen by 819,000 since February 2020, with 1.69 million people out of work in total. 

According to the new report, lower-paying jobs likely to have been affected were in manufacturing, hospitality, residential care and construction. 

However, the authors said while employment was falling for the low paid, the numbers finding work had increased in higher-skilled industries. 

Public services, technology and finance had bucked the trend, the researches found, warning this could risk “growing polarisation” in the jobs market and widening inequalities. 

The new research was paid for by the Standard Life Foundation, which funds research to tackle financial problems and improve living standards.

Mubin Haq, its chief executive, said the stark new findings highlighted how the pandemic had affected those on the lowest incomes. 

“This report provides further evidence of the pandemic’s severe impact on the low-paid,” Haq said.

“Lost jobs, reduced hours, insecure work, meagre sick pay. We have seen some progress but culture and practice remains poor in too many places. 

“More action on incomes, protecting rights and employment support is needed if we are to ease the financial pain and insecurity many families are facing.” 

The report concluded ministers could better support low paid workers through the crisis by extending “flexible furlough” through to Autumn, maintaining the £20 uplift in Universal Credit, reforming sick pay, investing in skills and improving protections for workers. 

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