Bridging the gap
To ensure economic prosperity, Labour must meet women's inequalities head on, writes Daniella Jenkins
We are often told that women’s economic equality can wait for less serious times. This tendency stems from two things: the systemic under-valuation of women’s net contribution to the economy, and growing numbness to the inequities we continue to face. Women remain systematically disadvantaged in ways that compound over lifetimes: the impacts of lower pay, insecure work, part-time jobs, discrimination, and unpaid care all accumulate to leave too many women poorer and less financially secure. For example, by the time they are in their early thirties, women already face an eye-watering 56 per cent gender pension gap. On reaching pension age, women find themselves, on average, with £67,000 less in their private pension pots, and they account for 57 per cent of pensioners living in poverty. Sadly, this is a predictable outcome of an economy and labour market that still does not value women.
This situation is not inevitable. Labour has recognised the problem, and since coming to power, has started to take action on multiple fronts.
With a 13 per cent gender pay gap, more women are classified as low earners, and nearly three quarters of part-time workers are women. The government’s landmark Employment Rights Act, including mandatory gender pay gap action plans for large employers, is poised to benefit women. The act also guarantees day-one rights to request flexible working, access to statutory sick pay without a lower earnings threshold, and strengthened parental leave rights, which will all help improve many women’s material living standards and narrow the gender pay gap. The urgency of the need for reform is most evident in adult social care. Women make up around 90 per cent of the 1.84 million workers in the sector in England, where median pay is just £11 an hour and more than one in five workers are on zero-hours contracts – six times the rate across the wider economy. As the backbone of adult social care, women, particularly Black, Asian and minority ethnic and working-class women, have for too long seen their labour undervalued. This situation reflects chronic underinvestment in our social care infrastructure. At the Women’s Budget Group, we have calculated that if the UK invested 2 per cent of GDP into social infrastructure, it could create 1.5m jobs, almost twice the returns from investing in construction. This should remind us that deep-seated gender biases remain locked into economic thinking and, as a result, we are failing to recognise the true social and economic value of care.
The introduction of social care negotiating bodies and fair pay agreements could transform this picture. Alongside the Casey Review, which will set out a plan to implement a long-promised National Care Service, a policy the Fabian Society has championed, Labour has ahistoric opportunity to recognise the value of care work. A National Care Service would not only improve pay and conditions for a largely female workforce but also ease the burden on unpaid carers, most of whom are women. It would further help the estimated 30 per cent of women who are currently underemployed by unlocking skills and bringing capacity back into our labour market.
Parental leave reform is another crucial lever. Day-one rights to parental leave are undoubtedly a huge win for parents, but they are just the beginning of the story. Statutory pay rates remain too low, and paternity leave remains far too short. We know the gender pay gap widens significantly once women become mothers. The government’s current review of parental leave is therefore a vital opportunity to support more equal sharing of care responsibilities and to prevent women from bearing long-term career, earnings, and savings penalties.
Equally important is childcare. The expansion of state-funded childcare hours is a welcome recognition that childcare is not just a family issue, but an economic one. Without adequate funding, however, the government risks undermining both its delivery targets and its promise to make the economy work for parents. Affordable, accessible childcare remains one of the most powerful tools available to expand women’s choices at work and to close gender gaps in pay and progression.
Labour has taken important first steps, but must remain brave, particularly as we confront questions around the future of work and the impacts of AI. To build strong foundations, we must be prepared to rethink how we define work to include care and the important work of raising healthy and resilient future generations. Tackling women’s economic inequality, then, remains fundamental to building a fairer, stronger economy for everyone.
