A new report by Office for National Statistics (ONS) outlined the impact of the coronavirus pandemic on the number of UK employees paid below the national minimum wage.
The newly released figures show that 2,043,000 people over the age of 16 (7.2% of the total labor force in the UK) were paid less than £8.72 per hour when the survey was conducted in April 2020.
More than four times the 409,000 jobs fell below the previous year’s minimum wage threshold.
The Coronavirus Employment Retention Scheme (CJR), launched by the UK government, supported more than 8.8 million employees in March. There, 80% of your regular salary is covered by the scheme, up to £2,500 per £2,500.
In particular, this was not a difficult and fast rule and it was not legally required to pay the final fifth round that employers could not bear the cost. Even if the government split additional business grants to keep businesses up, those who already have low-wage jobs in already struggling businesses are very likely to fall below the national minimum wage.
ONS figures show that lowest-paid jobs are more likely to be five times more likely to reduce wage arrangements and consolidate fears that the pandemic has been hit by the poorest sectors of British society.
The report showed that jobs that were clearly the most affected hourly wages in 2020 were jobs that were “at the lowest in wage distributions.” Hourly wages between the lower 5th and 10th percentiles of part-time jobs decreased by 16.1% and 8.1%, respectively, compared to 2019.
The Guardian overwhelmed the numbers on ONS, saying:
“The April snapshot suggests that businesses used the 80% wage subsidies provided by the government’s flagship scheme for the lowest-value staff, but it was more likely that high-paying staff would go any further to fill up and pay 100% of their regular wages.”
Even if businesses gradually remove staff from CJPS, the pandemic’s impact is set to affect low-income families the longest after HMRC reported more than £215 million was returned to the government in September.
A Charity Child Poverty Action Group (CPAG) report published in August warned that low-income families face “particularly serious” challenges during and after the pandemic. Their survey of 285 low-income households between May and August found that 80% reported “a significant deterioration in standard of living due to a combination of reduced income and increased spending.”
Low-wage jobs (which belong mainly to the “ages between 16 and 21 years old, food and drinks, and the arts, entertainment and recreational industries”) were most vulnerable to being redundant during the pandemic.
The UK’s unemployment rate rose to 4.5% between June and August this year, up 0.6% from the previous year. Employees ages 16-24 appear to be suffering disproportionately, with 220,000 employees falling to a record number of 3.54 million during the lockdown.
Overall, almost a quarter of 18-21 year olds were preyed on without top-up from their employers, compared to 9% of 40-59 year olds.
Nye Cominetti, senior economist at the ThinkTank Resolution Foundation, tells the Guardian that “evidence that young people and low-wage workers in customer roles suffered the most during the first lockdown” sets a worrying precedent once a long-term second wave settles in the second wave.
“This is a reminder of how important our broader social security safety net is, and as Covid Crisis continues through 2021, why should it be strengthened that it won’t be cut in the next April?”
