Women and Low Pay

Debate between Ruth Cadbury and Margaret Greenwood

Wednesday 18th November 2015 Westminster Hall

[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.

[Margaret Greenwood (Wirral West) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does she agree that, with 4.1 million children now living in poverty, tackling women’s low pay is a crucial part of improving the opportunities of those young people?

[Ruth Cadbury]

My hon. Friend is right. Children growing up in poverty do not have the same advantages and opportunities as many in their peer group. We cannot have a situation in which the adults of the future are not able to develop as they should in an equal, fair society.

Among examples discovered by the TUC of how brazen companies can be when they employ women was an advertisement in Wales for two seasonal roles—Santa Claus and Mrs Claus. Santa was to be paid a fair wage of £12 per hour, while Mrs Claus was paid the national minimum wage of £6.70 per hour. There was no difference in their job descriptions, and they both did the same amount of work, but the woman’s role was deemed to be of less value. That may seem like an interesting one-off, but it perfectly demonstrates how differently men’s and women’s work is valued 45 years after the implementation of the Equal Pay Act 1970.

Occupational segregation and the devaluing of work traditionally carried out by women, such as caring, directly contributes to the gender pay gap. That must be tackled and the Government must do more to diversify the labour market. As I have said, UK women earn on average 91% of what men earn. To put it another way, as of 9 November, just over a week ago, women are effectively working for free for the rest of the year. That is simply not acceptable in the 21st century. Progress has not been quick enough. Under Labour the gender pay gap reduced by a third—a trend that has, I admit, since continued; but while the gap has narrowed for full-time workers, it has widened for part-time workers and we must not be complacent.