Trade Unions Congress (TUC) has revealed that low earners were more likely than middle and higher earners to be forced to cut spending and take on debt during the pandemic.
BritainThinks conducted an online survey on behalf of the union of 2,231 workers in England and Wales between 19 and 29 November 2020. All respondents were either in work, on furlough, or recently made redundant.
The survey found that 50% of low-paid workers have suffered income loss in the pandemic, compared with 29% of high earners. Over a third (37%) of the respondents said that their household had suffered a reduction in disposable income since the pandemic began.
This rises to half (50%) for workers with annual earnings below £15k, while it is just three in ten (29%) for workers earning more than £50k.
The poll findings fall in line with the TUC published budget submission, which calls on the Chancellor of the Exchequer to improve pandemic support for low-paid workers, and to invest in job protection and creation to prevent an unemployment crisis following the pandemic.
The TUC’s budget submission revealed it has encouraged the Chancellor to follow the recommendations of the OECD to make greater use of fiscal policy to support the economy. The union said that by increasing support for working people and low-income households, the Chancellor would also be using fiscal policy to protect the economy and stimulate recovery.
Additionally, the union has suggested a permanent retention of the £20 per week increase in universal credit, and an end to the five-week wait for new universal credit claimants to receive payment.
TUC has suggested that low-paid workers have been worse affected because they are often employed on terms such as zero-hours contracts, which give them no protection when their hours of work are cut back.
Workers who are already struggling on low pay have much less flexibility than middle and higher earners to reduce spending and avoid debt. Hospitality, leisure and non-essential retail have had by far the highest rates of furlough, and they are both sectors with large numbers of low-paid workers.
Middle and high wage earners are more likely to have jobs that can be done from home, meaning they can avoid the need to be furloughed and may also make savings such as their usual commuting costs.
Frances O’Grady, general secretary for TUC, said: “When a crisis hits, the most exposed should get the most protection. But many low-paid workers are struggling through the pandemic on less money and with higher costs. And they are falling into deeper poverty and debt.
“Good government means stepping in to help. The Chancellor should help by extending furlough to the end of the year, with a guarantee that support will never be less than minimum wage. And last year’s boost to universal credit should be kept – permanently.”
She added: “Many of these low earners are key workers who have kept our country going. We owe it to them to build a fairer economy after the pandemic. The Chancellor should give Britain a workers’ budget next month. It should be a plan for full employment, with decent pay and job security for every worker.”