James T. Plunkett looks at why increased participation in the workforce by women may be the key to growth that this government needs.
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.
See also:
• The coalition continues its ‘women problem’ by taking away our pensions – Liz Snape, November 30th 2011
• Osborne’s mini-budget takes £1.7bn from women – Alex Hern, December 1st 2011
• More evidence Gideon’s savage attack on public sector pensions will hit women hardest – Nigel Stanley, November 21st 2011
• Boris is turning back the clock for women in London – Shelly Asquith, November 14th 2011
• Two weeks after ‘fixing’ it, Cameron creates a new “women problem” – Alex Hern, October 17th 2011
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17 Responses to “Women’s work – an opportunity for growth we can’t afford to pass up”
Noxi
RT @leftfootfwd: .@JamesTPlunkett explains why fighting to get women into the workforce is good for the whole economy: http://t.co/9zj3gkId
Jim Lockie
I welcome and fully support the findings in this article. My own experience from wider family and friends and as a former Jobcentre manager is that there is a great pool of women, either younger at home looking after children or older people, considered too old for work by employers AND THEMSELVES .
For Young Parents: A social support scheme linked to Sure Start type centres, with mentors/teachers to encourage younger, less well educated and work experienced women to have a belief in themselves and become employable. Coupled with funding for chidcare, or before and after school clubs would improve the incomes and lives of so many women and help provide role models for young girls. This would need to be coupled with changes to the benefit system to allow low earners not to lose all of their benefits when starting work.
For Older Women: These may be early retired (often not by choice), those on long-term incapacity benefits, or simply women who stayed at home with children and have never worked. Again not only a vast wasted resource, but many who could improve the quality of their lives enormously as well as in the long-term reducing the welfare bill.
The costs of these programmes could be high to start with but in the long-term would be, at a minimum self-financing, or even lead to savings. To fund it now, (or in 2015) I strongly support the reduction in pension tax relief to basic only. Other possibilities include wealth taxes to increase tax take of the super rich and a stringent investigation into agriculture subsidies from UK /EU.
JOY-joy et al!
RT @leftfootfwd: .@JamesTPlunkett explains why fighting to get women into the workforce is good for the whole economy: http://t.co/9zj3gkId
BGMarkstad
The assumption we benefit from longer working hours is purely financial. In many nations the reverse is a goal- to have more time for family. The assumption women need to have more involvement in paid labor needs finessing- maybe women just need more pay for the labor they are already doing. The wage gap between men and women must be addressed. But the assumption that women who are not being paid are therefore ‘not working’ is very problematic. In fact it is the antithesis of feminist theory for the past 15 years. The push since the Platform for Action in Beijing in 1997 was in fact to get all nations of the UN to start to notice and tally the work women were already doing, but unpaid. The time use surveys of such labor around the world reveal that when women do care giving roles at home they are actually benefitting the national economy and their work amounts to a third of the GDP. To take it for granted was wrong. To urge women away from it is just shooting yourself in the foot. If we have to substitute for the work women are doing at home and pay professionals to do it instead, the bill to the state for this enabling will be huge. Universal childcare, universal eldercare, universal palliative care, universal care of the sick in hospitals not at home is just not affordable, nor is it the preference of m ost who need care.
So plan b is to value the work women do at home and to in some way enable it. IN Canada a Sasksatchewan program for instance funds a family member to provide care to a frail senior at home. It ’employs’ the woman I guess, but most important it recognizes care roles. The slogan of the NOW in the US is “Every mother is a working mother. We must as womens rights promoters insist on this attitude.
Mary Honeyball
RT @leftfootfwd: Women’s work – an opportunity for growth we can’t afford to pass up http://t.co/tV9j6Dwp good work by James Plunkett