Women and Low Pay

Debate between Ruth Cadbury and Gregory Campbell

Wednesday 18th November 2015 Westminster Hall

[Ruth Cadbury]

My hon. Friend is absolutely correct: this is about not just the low pay women receive, but the interconnection with zero-hours contracts, the benefits regime, tax credits and, of course, pensions, because a working life on low pay means a retirement on a low income.

Although the pay gap among top earners is nearly 55%, we also need to ensure, as my hon. Friend said, that we address women’s pay at the other end of the spectrum, among those who are stuck in low-paid minimum wage jobs, who are, too often, on a zero-hours contract. Indeed, the majority of low-paid workers are women, and three in five minimum wage jobs are held by women.

Every major piece of legislation that has improved the lives of women has been introduced by the Labour party. From the National Minimum Wage Act 1998 to the Equality Act 2010, Labour has always been at the forefront of the fight for equality. The Government certainly know how to talk the talk on equality, and the Prime Minister pledged to end the gender pay gap “within a generation”, but with 85% of Government tax and benefit cuts hitting women, Ministers are giving with one hand and taking from women with the other.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Lady on securing the debate. She alluded to the Prime Minister’s comments about dealing with the issue within a generation. Does she agree that although successive Governments, including the Labour Government, have made marginal progress—some have made more significant progress than others—our ambition should be about much more than dealing with this issue within a generation? It should be dealt with immediately—within the lifetime of this Parliament.

[Ruth Cadbury]

The hon. Gentleman is absolutely right: we need action, not words. One of those actions is the living wage—or should I call it the true living wage, so as not to confuse it with the rebranded minimum wage? The true living wage is an hourly rate set independently and accredited annually. It is calculated according to the basic cost of living, not median earnings, unlike the new national living wage. The current living wage is £8.25 an hour, with the London living wage at £9.40 an hour. Employers choose voluntarily to pay the living wage.

Labour local authorities are taking the lead in rolling out the living wage. I am proud of the role I played in Hounslow Council in implementing it for the staff of not only the council, but its contractors, many of whom are women. That is making a difference locally to many women’s lives and workplaces.

During the recent living wage week, my hon. Friend the Member for Stretford and Urmston (Kate Green)—the shadow Women and Equalities Minister—highlighted the importance of fair pay for women on a visit to a group of school meal staff in Camden who had recently been awarded the London living wage. That pay rise was due to a sustained campaign by the Camden New Journal and Unison, which put pressure on the company that employed the women so that it would give them the living wage they deserved. On receiving her pay increase, one of the women was delighted. She said the extra few pounds a week meant she would be able to save a bit of money each month and eventually have enough to go on a family holiday—her first. That made such a difference to her.

That is good for not just the employees, but their employer, which has seen increased staff satisfaction, leading to higher retention rates. Indeed, it previously had high staff turnover, with 40 vacancies to fill last summer; this year, it had only two. That is the point: having a large section of our workforce on a low wage is bad for business and bad for the economy. The Government consultation on the gender pay gap discovered that equalising women’s productivity and employment with men’s could add almost £600 billion to the economy.

The Government have taken some lessons from the last Labour Government. One is that, for most women, childcare is a barrier to labour market participation, and that is even truer of women on low pay. The Sure Start initiative was introduced because Labour recognised that women were more likely to be in low-paid jobs and, therefore, that childcare needed to be subsidised to help them back into work.

It frustrates me that, to help women back into the workforce, there has to be recognition that women’s employment is, on average, less well paid and of less value. Although it is good to see more women able to participate in the labour market, TUC research has shown that more than half the job growth for women since 2010 has been in low-paying sectors. Why is women’s work less well paid? The work that women do is crucial to the functioning of society, but their pay does not reflect that.

Despite the fact that women’s qualifications are as good as, or better than, men’s, they are not rewarded. Women occupy 78% of jobs in health and social care—a sector where the average salary is £40 per week less than the UK economy average. By comparison, men account for 88% of those working in more lucrative sectors, such as science, technology and engineering.

It is harder for women to find good-quality jobs. Evidence suggests that women become “discouraged workers”, resulting in fewer of them working or actively seeking work. They are discouraged workers because they face real challenges in finding decent-quality work, and the work they traditionally carry out, such as catering, cleaning and caring, is too often low paid and undervalued.