By Mary-Ann Stephenson
As we emerge from the Covid pandemic, we are facing a major cost of living crisis. The Resolution Foundation warned today that the monthly inflation peak this spring could be as high as the 8.4% reached in 1991, and that prices in 2022/23 will be up for 7.6% from 2021/22, higher than the Bank of England forecast of 6.2% in February.
Although some of the forecast increase in prices is the result of the war in Ukraine, it is important to remember that this is also a crisis of incomes. Over a decade of austerity policies, low wage rises and cuts to social security have left many people in poverty. While the richest households saved money during Covid, the poorest fell further into debt, with no cushion to cope with rising prices now.
And women, particularly working class women, Black and minority ethnic women and disabled women are likely to bear the brunt of this crisis. Over ten years of austerity, particularly cuts to social security, have hit BME women hardest of all as our research with the Runnymede Trust showed.
More recently, Women’s Budget Group analysis of ONS data shows that women’s wages have increased at a slower rate than men’s. Between 2020 and 2021 full time male weekly wages increased by 5.12%, while full time female wages increased by 2.53%. The 3.1% increase in benefits planned for April, is less than half what is needed to keep in line with inflation, and will hit women harder as they are more likely to rely on social security for a larger part of their incomes.
The poorest households would be hardest hit by rising food prices: 23% of the poorest tenth of households’ expenditure is on food, compared to the richest tenth who spend 10%. Women are more likely to be poor than men, and more likely to be the ‘shock absorbers of poverty’, managing household budgets in poor families and skipping meals or going without warm clothes to keep their families fed and rent and bills paid.
Faced with this crisis, the Government must take urgent action. Universal Credit and other benefits should be increased in line with inflation, along with the removal of the benefit cap and the two child limit. We need a properly enforced and higher rate minimum wage, and a commitment to a real living wage. But we also need investment in care. For many women, the problem is low earnings as much as low pay, because women’s unpaid care reduces their time for paid work. So we need investment in childcare and social care.
Mary-Ann Stephenson is Director of the Women’s Budget Group, wbg.org.uk. She is a speaker at the Trade Union Coordinating Group fringe meeting at the Women’s TUC on Thursday 10th March, at 5.45pm. Register here
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