Blog & Articles

Women’s work – an opportunity for growth we can’t afford to pass up

James Plunkett
Date: 12. December 2011 / Category: Living Standards

This post originally appeared on Left Foot Forward

As economic forecasts continue to head south, it’s worth pausing to ask a simple question:

Where exactly do we expect future growth in living standards to come from – even once a recovery takes hold?

The list of possible answers to that question isn’t long.  In fact, when it comes to household income growth, there are effectively four:

    • Pay could grow faster than inflation

    • We could all work longer hours

    • More of us could work; or

    • The state could get more generous

One implication of taking a hard-headed approach to living standards is that it helps us hold politicians’ feet to the flames when they say they have a strategy for easing the squeeze.

Anyone who talks of a general intention to ‘rebalance the economy’ needs to explain which of the four drivers of household income their strategy will operate through. Will it boost pay, working hours, employment or households’ tax-benefit position?

Another implication is that when we do identify a possible source of future household income growth – and especially progressive household income growth – we can’t afford to pass it up.

The good news on this front is that two reports this week point to one such opportunity: growth in women’s employment.

The first report, our own from the Resolution Foundation, shows quite how much headroom we still have to raise female employment in Britain.

In 2010, the UK ranked just 15th in the OECD on female employment, just behind Slovenia. If you compare the UK’s performance to better performing countries, around a million women are missing from the UK workplace.

As the below chart from the report shows, two groups of women in particular help to explain our poor performance: those in their 30s, who are far more likely to have young children, and those in their early 60s, past the (now abolished) Default Retirement Age.

The second report, from the IPPR, identifies one way of helping to close the first of these gaps. It calculates that the cost of providing free universal childcare in the UK would be £6.7 billion, and finds that this price tag could be met by restricting tax relief on pension contributions to the basic rate.

The report makes a powerful case for the economic benefits that would flow from higher female employment.

As Nick Pearce of the IPPR says:

    “At a time of severe fiscal constraint, it is vital for Britain to focus resources where they will make the most difference – in helping families with the cost of living and strengthening the public finances over the long term.”

So far so promising. So what’s the bad news? It’s that we’re in danger of passing this opportunity up. In the case of the coalition, both reports remind us once again of the shortfalls of a deficit strategy that isn’t informed by a serious strategy on living standards.

Back in June 2010, funding for childcare was one of the first areas the government looked to for cuts, dramatically worsening the employment prospects of millions of low income women, hitting their living standards over the short- and the long-term.

And for Labour too, the UK’s performance on female employment raises some difficult questions.

Their years in power saw a dramatic expansion of publically funded childcare but also a much more significant increase in spend on tax credits, including billions spent on families with older children. Was that balance right or could more have been done to build institutions such as universal childcare, supporting more women into work?

For the foreseeable future, investments in such services will mean making difficult choices about where else to cut.

back to list

Share this



Tag Cloud

Gavin Kelly Resolution Foundation living standards childcare James Plunkett Housing wages inflation tax credits Squeezed Middle tax Vidhya Alakeson coalition inequality Matthew Whittaker minimum wage new statesman Debt Spending Review female employment growth low pay Squeezed Britain Universal Credit autumn statement Labour USA welfare women work incentives Budget 2012 employment generation rent giselle cory household income IFS institutional investment interest rates labour market living wage low to middle income politics recovery social mobility affordability Audit budget 2011 cameron Commission on Living Standards distribution earnings economy Ed Miliband education fiscal choices household debt living low pay commission older workers skills social care spending round sr2013 unemployment zero hours Affordable Housing America bank of england budget child benefit child poverty cost of living David Cameron debt target degree Guardian income jared bernstein joe coward lee savage Lib Dems living costs measuring poverty middle class mortgages Obama pay poverty recession tax cuts uk 10p arrears benefits borrowing Commission cpi cuts david willetts debt forgivenes dilnot Donald Hirsch fiscal forbearance gearing George Osborne great stagnation household housing market huffington post income tax ippr Ipsos MORI jobs gap lane kenworthy Low earners matthew pennycook monetary policy Nick Clegg pension Pensions personal allowance personal allowances polarisation precarious work prices prospect q2 growth regional renting rpi shared ownership social housing social mobility foundation Sophia Parker standards sutton trust tax changes tax relief think tank think-tank underemployment Wage squeeze 2013 Work working poor zero hours contract 'Annual Survey of Hours and Earnings' 'earnings squeeze' 'squeeze' 'wage stagnation' #ows £10000 2011 2012 50p 99% a matter of time Alan Johnson Alex Hurrell allowance andrew haldane Anna Vignoles apprenticeships ASHE assets Australia below minimum wage benefit freezes borgen Boris Johnson budget 2013 cap care assistant centreforum chancellor childcar choices CiF citizens UK Coalition politics Conor D'Arcy conservatives contracts Cost of Motherhood costs council tax council tax benefit CPIH daniel chandler datablog de-coupling debt peril deficit department for education dependency election election 2015 enforcement equity release family felicity dennistoun Financial Times first-time buyers food prices full employment gap GDP gender gingerbread good life gregg growth without gain HELP Committee higher rate higher rate tax relief hmrc holmes homeownership hourglass household finances household spending illegal in work income inequality incomes increase Independent indignados international jobs John Van Reenen jrf Labour Party Left Foot Forward liberal democrats living wage foundation LMIs low middle earners Low Pay Britain low pay threshold low to middle income earners low wage low wage work machin marginal tax rate marriage tax allowance matt whittaker matthew hancock mayhew median real wage median wage Mervyn King Middle Britain miminum wage minimum income standards missing out mobility Montague mortgage market mothers national minimum wage netmums new statesman blog new year newby newham niesr nil hours number paid below minimum wage nursery world OBR occupy occupy wall street OECD older ons over 50s paul gregg pay and pensions pay progression pensions relief personal personal finance pledge cards policy politicans poll population precarious employment predistribution prescription charges priorities private rented private rented sector private sector growth progression prs public sector public services public spending ratios reduce credit card reform Regions Rented Sector resolution foudnation retirement robin wales robots routine jobs RPIJ rss savings self-employment Senate shared shereen hussein social society southern cross spending cuts squeezed state state pension age statistics steve machin tax and benefit changes tax and benefits Tax Benefits technology The Spirit Level threshold tories travel time Treasury trends unison university US election van reenen VAT voters voting wage wage growth wage inequality Welfare Debate welfare state White Paper workers Working part time lower skilled job young people Youth unemployment youth wages zero-hours