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Coronavirus crisis risks deepening inequalities in London as low paid workers hit hardest
Low paid Londoners have borne the brunt of the coronavirus crisis, according to new research which warns that the capital will be both poorer and less equal
The report – based on a survey of over 1,000 Londoners and analysis of new employment data – shows that low paid Londoners are over twice as likely to work in the ‘shutdown sectors’ that have been hit hardest by the crisis. On the eve of the crisis, one in three (33%) low paid workers worked in shutdown sectors, compared to one in seven (14%) of other workers. While the lockdown is slowly lifting, low paid workers remain more concerned about their job prospects; four in ten (42%) are worried about keeping their job, compared to three in ten (32%) other workers.
Low paid workers are far more likely to have seen a hit to their income as a result of the crisis:
Over one in three (36%) low paid Londoners have seen a drop in their personal income, compared to just one in five (21%) among other workers;
Low paid workers are far more likely to be worried about their finances (39% compared to 24%);
Low paid workers are nearly three times as likely to say they have fallen behind with their bills (11% compared to 3%), and that they are struggling to afford the basics more than usual (11% compared to 3%).
The impact of the coronavirus outbreak on London’s low paid workers
There are also concerns that the crisis will lead to deeper gender inequalities in the capital. Over four in five (83%) of London’s low paid workers are women, and low paid women are more likely to work in the shutdown sectors that have been hit hardest by the crisis.
While London’s economy is gradually reopening, there is a risk of a ‘second wave’ of job losses when the government’s furlough scheme ends. 1.3 million Londoners have been furloughed during the crisis, with the government stepping in to pay their wages. With the Office for Budget Responsibility estimating that 15% of furloughed workers will be unable to return to their previous jobs, this could lead to a further 200,000 redundancies in the capital.
Stephen Evans, chief executive of Learning and Work Institute
London was already the most unequal region before coronavirus, and the pandemic will make this even worse. Our research clearly shows that low paid Londoners face the greatest risk from the economic fallout of the pandemic.
We need to see national government and the Mayor of London working together to protect low paid workers, and to avoid a ‘second wave’ of unemployment as the furlough scheme ends. Beyond the crisis, we need to build back better, ensuring that the post-crisis labour market has lower levels of poverty, and better work for all.
Bharat Mehta, Chief Executive at Trust for London
Coronavirus has laid bare the significant inequalities that existed in London even before the crisis hit. Low pay workers have had to endure inadequate pay and job insecurity long before this pandemic. It’s deeply worrying that those in low pay work have been hardest hit during lockdown.
We also know that the longer-term economic consequences of Covid-19 are likely to disproportionately affect those on low pay. As we emerge from the pandemic, we need tackle this injustice through a new settlement to improve pay and conditions for low-paid workers, making London a fairer city for all.