Cuts will reduce women's income and widen the gender pay gap, says TUC

7 Dec 2010 11:18 AM

Public sector job losses and welfare cuts will disproportionately hit women's income and set progress on closing the gender pay gap back years, the TUC warns today (Tuesday), as it publishes a report on the gender impact of the cuts.

Ahead of the latest pay gap figures published tomorrow, the TUC has used official earnings data to calculate that the gender pay divide, based on median hourly earnings, is nearly twice as high in the private sector (20.8 per cent) as it is in the public sector (11.6 per cent).

The TUC believes that the fall in city bonuses and the relative lack of public sector job losses during the recession helped close the gender pay gap in recent years but fears tomorrow's figures, based on 2010 earnings, could mark the start of a growing gender pay gap.

On average women working in the public sector earn almost 40 per cent more per hour than female employees in the private sector. This highlights the importance of public sector employment in raising women's wages, says the TUC.

The TUC is concerned that as women represent 65 per cent of the public sector workforce, they will bear the brunt of the estimated 400,000 public sector job losses over the next four years.

In local authorities, which are expected to take the biggest employment hit, women make up 68 per cent of the workforce. As a result, hundreds of thousands of women are likely to struggle to find work and those that do will probably have to take a significant pay cut if they can find a job in the private sector.

Public sector job losses will be felt particularly hard by women working part-time as the average pay for part-time jobs in the private sector is just £6.78 an hour (compared to £9.34 in the public sector), says the TUC.

The public sector also has a far better track record on pay equality, particularly for women working flexibly or part-time to balance childcare commitments, says the TUC. Cutting hundreds of thousands of public sector jobs when so few similarly skilled jobs exist in the private sector will set progress on closing the gender pay gap back years, the TUC warns.

And while the Office for Budget Responsibilty's recent reduction in its forecast for public sector job losses is welcome, the savings are being paid for by even harsher cuts in the welfare budget, which again will fall disproportionately on women, the TUC says.

The TUC report The Gender Impact of the Cuts cites research carried out by economists Howard Reed and Tim Horton. This finds that lone parents, 90 per cent of whom are female, will be hit hardest by the spending cuts, losing 18.5 per cent of their net household income, or £3,121). Single female pensioners are next hardest hit, losing 11.7 per cent of their net income, or £1,326.

The TUC report also cites the gender audit of the emergency budget in June carried out by the House of Commons library, which found that 72 per cent of the changes in taxes, benefits and tax credits will hit women.

Spending cuts, tax and benefit changes and public sector job losses are going to hit women financially through lower wages, reduced state support for childcare and housing costs, and by the slashing of public services they use every day, the TUC warns.

TUC General Secretary Brendan Barber said: 'Progress in closing the pay gap has been painfully slow and could now be set back decades by the government's austerity programme.

'Many women choose to work in the public sector because there are jobs that match their skills, and because it offers secure and flexible work that allows them to combine work with their caring responsibilities.

'As the full impact of public sector job losses becomes clear, many women could find themselves having to take lower skilled work and a significant pay cut, or struggle to find work at all. This would be a shocking waste of talent and have a devastating impact on family incomes.

'The government cannot sit back and let women bear the brunt of public sector job losses, tax and benefit changes and cuts to public services. A radical rethink of the impact its policies are having on women is needed, starting with making low-income families the beneficiaries of welfare reform, rather than the losers of the welfare cuts.'

NOTES TO EDITORS:

- The Gender Impact of the Cuts can be downloaded under embargo at www.tuc.org.uk/genderimpactofcuts

- The gender audit of the emergency budget can be downloaded from www.yvettecooper.com/women-bear-brunt-of-budget-cuts

- The gender pay gap is usually calculated by comparing mean full-time hourly pay (excluding pay), and is currently 16.4 per cent. The EU, which does not distinguish between full and part-time work, calculates the UK pay gap at 21 per cent. The gender pay gap using median earnings is 12.2 per cent.

Median hourly earnings (excluding overtime) by gender, hours and sector

Source: Annual Survey of Hours and Earnings 2009

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Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
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Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk