Context

Previous research has suggested that low paid workers have been disproportionately affected by the pandemic. This report – in the form of a briefing note - seeks to explore whether these impacts are also being reflected in the official Office of National Statistics (ONS) Labour Force Survey (LFS) data for February to April, 2020. Only one full month of these three is in the crisis period, and so the headline LFS measures were showing very little impact of the pandemic on the labour market, hence the focus of this analysis on low paid workers, to see if the data shows an early impact.

The study

The study was conducted by The Institute for Employment studies, an independent, apolitical centre of research and consultancy in employment policy and human resource management. It was funded by the Standard Life Foundation, an independent charitable foundation, as part of a new project exploring the employment and financial impacts of the pandemic on low-income working households.

The analysis is restricted to employees, and defines as low paid those workers who report earnings below the Real Living Wage. This question is only asked in the first and fifth quarter of the LFS, so missing values have been imputed by reference to the Annual Survey of Hours and Earnings, an ONS survey which is the most comprehensive source of information on the structure and distribution of earnings in the UK.

Key findings

The study finds far greater impacts for low paid than higher paid workers:

• , to be under-employed and/ or to have lower qualifications. So those in low paid work are already disadvantaged in the labour market compared to higher paid workers.
• but is unchanged for those in higher paying jobs. This suggests that there is a sizable group of people, in previously low paying work, who have not been protected by the Job Retention Scheme or Self-Employment Income Support and are now out of work.
• – with low paid workers two thirds more likely to be in temporary work, three times more likely to be part-time, and nearly five times more likely to be on zero hours contracts than higher paid workers.
• (but still employed), and report a greater reduction in usual hours of work, than those in higher paying jobs.
• – double the rate for those in higher paid jobs, and equivalent to 400 thousand low paid workers seeking other work.

The authors conclude that these findings highlight the importance of focusing on how we support those in lower paid work during the crisis and in the recovery, and in particular to address the quality and security of low paid work, support in work, and help to find new work where this is sought.

Points to consider

• The briefing note gives no details of the survey approach used. However, the LFS is a study of the employment circumstances of the UK population, carried out by the ONS. It is the largest household study in the UK and provides the official measures of employment and unemployment, so the methodology is likely to be rigorous and reliable.

  • Similarly, the Annual Survey of Hours and Earnings survey, which was used to impute missing data is also produced by the ONS.
  • The authors note that in order to classify workers in low paid and higher paid groups it was necessary to exclude those who did not state their hourly wage or a current/ previous occupation group. As a result, employment rate estimates in this study are higher than the ONS figures for the whole workforce. However, they conclude that these figures are useful for comparing groups and examining trends over time.

• The study took place at the very beginning of the coronavirus crisis and the situation is likely to have changed considerably as the situation continued. However the findings are still relevant in highlighting the differences between higher and lower paid workers, and the need to safeguard those in lower paid roles.

• The study is specific to the UK and to low paid workers during the coronavirus crisis
  • The report is applicable to anyone with an interest in the impact of coronavirus on employment or on the financial situation of the low paid, such as government, support agencies, policy makers, policy implementers or regulators.