Fair and flexible labour market: building back better

Much has been reported on the recovery from the pandemic and how things can be ‘built back better’ but what about those groups that have been disproportionately affected?

Recent research has highlighted the unequal impacts the pandemic has had on particular groups within the labour market.  From the lowest paid to part-time workers and women, research has considered how things could be moved forward so that those that have borne the brunt of the economic impact are not left behind. In this blog, we take a look at some of these publications, each of which highlights the need to create a fairer and more flexible labour market.

Low paid workers: new settlement needed

The Resolution Foundation’s latest annual Low pay Britain report has warned that the low paid are at greatest risk of becoming unemployed once the furlough scheme ends in September.

Despite the positive backdrop for low paid workers in the run up to the crisis with a fast rising minimum wage following the introduction of the National Living Wage (NLW) in 2016 – which has driven the first sustained fall in low pay for 40 years – the Covid-19 crisis has adversely affected the low paid to a much greater degree than the higher paid. The research showed that workers ranked in the bottom fifth for pay were three times more likely to have lost jobs, hours or have been furloughed than the top paid fifth. Low paid workers are also more likely to work in the sectors most impacted by the pandemic – hospitality, leisure and retail.

As the economy reopens, however, so too do the sectors most restricted over the past year which improves the prospects for low paid workers. Indeed, they are now returning to work fastest. In April alone, almost a million workers came off furlough – more than half of them employees in hospitality, leisure or retail.

But while the report highlights the positive prospects for the low paid, it also addresses several key issues that policy makers will need to consider if the low paid are to benefit from the recovery. Major risks for the low paid are identified:

  • higher unemployment
  • decreasing job security
  • infringements of labour market rights

It argues that low paid workers’ relative unemployment risk after the pandemic is likely to be particularly high given the possibility of structural change concentrated on low paying sectors. And if unemployment rises, it is noted that job quality and infringements of labour market rights are likely to deteriorate.

The Resolution Foundation calls for a new settlement for low paid workers, arguing that “policy makers must look beyond the minimum wage – to job security and labour market regulation – for ways to ensure it’s a recovery that benefits low paid workers”.

Part-time employees: must be included in the recovery

As we move towards the end of restrictions and of the furlough scheme, cracks have also started to emerge for part-time workers, who have been “clinging on in a volatile labour market” according to recent analysis by the Timewise Foundation.

This report notes that part-time employees are one demographic that hasn’t had the same level of scrutiny in the literature as other disproportionality affected groups.

The experience and outlook for part-time employees appears “particularly bleak” according to the report. Despite the furlough scheme being effective in protecting millions from unemployment, it is argued that it is actually masking significant challenges – most notably for part-time workers. The disproportionate impact on part-timers has seen them face higher levels of reduced hours and redundancy. They are also less likely than full-timers to return to normal hours and to hang on to roles during lockdowns.

Evidence shows 44% of part-time employees who were away from work during the first lockdown continued to be away from work between July and September 2020, when restrictions began to temporarily ease. This compares to 33.6% of full-time employees.

The majority (80%) of part-time workers also do not want to work more hours but as Timewise data shows, only 8% of jobs are advertised as part-time – “simply too big a problem to ignore”.

In response to the analysis, a vision for change is set out, focusing on creating a fair and flexible labour market that will:

  • support those in everyday jobs to access flexibility
  • help the millions of people who want or need to work flexibly to find flexible opportunities
  • remove some of the barriers to support those trapped in low-paid work and unable to progress

Women: promoting a gendered recovery

Women have also been disproportionately affected in the labour market, particularly as they are often employed in low-paid and part-time jobs within shutdown sectors such as hospitality and retail, which are notoriously characterised by job insecurity.

This was highlighted in a recent briefing paper by Close the Gap and Engender which looked at the impacts of Covid-19 on women’s wellbeing, mental health, and financial security in Scotland. The paper confirms pre-existing evidence that women have been particularly affected by rising financial precarity and anxiety as a result.

The closure of schools and nurseries and increased childcare disproportionately affected women’s employment and women’s propensity to work part-time places them at greater risk of job disruption. The data shows that young women and disabled women are being particularly impacted by the pandemic.

Key findings include that women are more likely than men to be receiving less support from their employer since the first lockdown, and were significantly more likely than men to report increased financial precarity as a result of the crisis – this was particularly the case for young women and disabled women. Timewise points to the potential for this to add to a growing child poverty crisis.

Similarly to the above reports, which call for the specific affected groups to be included in any future employment strategy, this report concludes by highlighting the importance of a gender-sensitive approach to rebuilding the labour market and economy.

Final thoughts

While furlough has undoubtedly protected many within those groups who have been disproportionately affected by the pandemic, this is only temporary and as all three reports above suggest, these groups are at greatest risk of unemployment and job insecurity when the scheme finally ends.

The research clearly calls for a fairer and more flexible labour market with stronger and better rights for all workers. Failure to address this in the attempt to build back better will only serve to increase the inequalities that already exist in the labour market.


The reports highlighted in this blog post have recently been added to The Knowledge Exchange (TKE) database. Subscribers to TKE information service have direct access to all of the abstracts on our database, with most also providing the full text of journal articles and reports. To find out more about our services, please visit our website: https://www.theknowledgeexchange.co.uk/

Further reading on employment issues from The Knowledge Exchange Blog:

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