Economic impact of Covid-19 compounding existing inequalities in Wales, report finds

Wales’s lowest earners were ten times more likely to have been affected by the Covid-19 shutdown than those on the highest salaries, research shows.

The briefing paper from Cardiff University’s Wales Governance Centre says almost half of those bringing home the smallest incomes were working in jobs that were forced to stop due to the lockdown.

As well as low earners, the study shows the economic disruption caused by coronavirus is also being felt most acutely by younger workers, women and those from BAME backgrounds.

Researchers estimate there were approximately 228,000 workers in Wales employed in sectors shut down by social distancing measures, amounting to 16% of the working-age population.

Employees under the age of 25 were almost three times as likely to have been working in these sectors. The impact also varies by gender, with 18% of female employees working in shut-down sectors compared to 14% of male employees.

The study shows younger women have been hit particularly hard, with 39% of all female employees under 25 working in shut-down sectors.

Over two-fifths (44%) of workers of Bangladeshi ethnicity were employed in shut-down sectors prior to the crisis, almost three times the share of those of White British ethnicity (16%) and compared to 24% of Black Caribbean and 17% of Pakistani ethnicity.

Jesús Rodríguez, of the Wales Fiscal Analysis programme, said: “Covid-19 has had a severe effect on the Welsh economy, evidenced by the huge number of workers being supported through the furlough and income support schemes and an unprecedented rise in Universal Credit claimants.

The report also analyses the workers in Wales designated as key workers, which make up a much higher share of the Welsh workforce at 31%, compared to the UK average of 26%. In Wales, 14% of the working-age population is employed as a health key worker, double that of London (7%).

Women in Wales are twice as likely to be designated as key workers than men, the findings reveal.

The research shows that workers from BAME backgrounds are twice as likely to be employed in the health and social care sectors than those of White British ethnicity. This analysis follows emerging evidence that BAME individuals are experiencing more serious health effects from Covid-19.

Commenting on the findings of the report, Dr Alison Parken, the Interim Chair of the Equalities and Human Rights Commission (EHRC) Wales Committee said: “This research shows the extent of the employment impacts of Covid-19 and that in broad terms, those already disadvantaged will again bear the brunt of job losses, insecurity and lower incomes. It is vitally important that such data is central to planning and developing an economic recovery that proactively addresses these growing inequalities.”

Leila Usmani of Race Alliance Wales said: “This report highlights again long standing, systemic racial inequalities in this country. Economically hit by loss of income or increased exposure to Covid-19, this disproportionate impact is unacceptable. Society is holistic, and we will continue to call for changes that will lead us to eradicate structural racism in all sectors, which have contributed to these shocking figures, and the saddening stories we hear from the people behind the numbers.”

Catherine Fookes, Director of the Women’s Equality Network Wales, commented: “We welcome this report which sheds light on the disproportionate impact that Covid-19 has already had on women’s employment –  it shows that women are more likely to be key workers and yet they have been more exposed to loss of employment and earnings during the Covid-19 crisis than men.

“We welcome the report’s recommendation that the recovery response must target women specifically. We urge Welsh Government to ensure they take this into account. We believe this support should include an increase in the living wage and provide a Universal Basic Income.”