Unemployment, debt, and food banks: young women facing financial insecurity

Last week I spoke to Young Women’s Trust about how the coronavirus crisis was impacting young women’s mental health. Financial pressures are a key factor affecting the mental health of young women alongside the associated stress and anxiety of not knowing if they will make ends meet.

The coronavirus crisis has left millions of people furloughed or out of work as entire sectors of our economy were shut down. There are currently 47,000 more young people unemployed compared to last year (ONS 2020), and fears this figure will only increase as the furlough scheme is withdrawn in the autumn. In part this is due to the disproportionate impact the pandemic is having on low paid jobs, which are commonly undertaken by young women (IES 2020). Being furloughed and unsure what the future holds, out of work and struggling to stretch their universal credit, or competing for the few vacancies there are alongside millions of others, puts young women in a financially precarious position.

I discussed how the financial impacts of Covid-19 are affecting young women with Georgie Whiteley, Research Lead at Young Women’s Trust:

Before the Coronavirus crisis hit, young women were already struggling financially. Last year, Young Women’s Trust’s research found that 40 per cent of young women found it hard to make their cash last until the end of the month. Now, young women are amongst those worst affected by the crisis. They are disproportionately likely to work in the sectors that have been hardest hit by the lockdown: 36 per cent of young women, compared to 25 per cent of young men, work in sectors that were shut down, including restaurants, retail, leisure facilities and travel and tourism (IFS, 2020). Consequently, young women are more likely to lose their job. In fact, almost twice the number of women reported that they have lost their job because of the Covid-19 pandemic (8.6%) compared to men (4.4%; IZA, 2020).More and more young women are signing up for YWT’s Work It Out job coaching service because they are concerned about job security.

As a result, young women are being pushed to the brink financially. In YWT’s survey of 200 young women, 84 per cent were concerned about their future finances,64 per cent of expected to lose money because of the crisis, and a quarter said they expected to lose more than £100 a week (YWT, 2020). The financial fallout of the crisis has left young women skipping meals so that their children can eat, using food banks to cope and taking on debt. Despite all this, young women are largely ignored in the government response and will continue to be among those facing the biggest economic difficulties.

Katrina Brown, 25 years old, shares her experiences:

I am a working lone parent, so life was very busy before the Covid-19 outbreak. A normal week for me involved looking after my son and nephew for five days. Then on my two working days, I would travel to work in central London. This meant 5am starts, dropping my son to nursery, commuting by train, and finishing work at 4.00 pm. I found the job stressful but I also felt empowered earning my own money as I became less financially dependent on my family.

I have been asked by my employer to work from home since the end of March. I initially found remote working challenging because I had reduced childcare. I then decided to work during the late evening when my son fell asleep because I found multitasking work and caring responsibilities too stressful and dangerous with an active toddler.

Previously my contract was renewed on an automatic basis and my manager was trying to make me a permanent member of staff but I was recently informed me that my fixed-term contract will not be renewed in September. I am currently claiming the working element of universal credit and childcare expenses plus I receive a wage. Soon I will be solely relying on universal credit as my main source of income and my childcare package will stop.

I am starting to look for part-time admin work in education or the NHS. My main concern is the increased competition — I applied for a job and it said 750 people also applied. I am aware the odds of me finding work soon are slim and I will have to live on a tighter budget.

Unfortunately, Katrina’s story will be echoed by thousands of young women around the country, and her fears about competition are well placed. The impact of Covid-19 is being felt disproportionately across industries, meaning large groups of people with the same skills sets will be in contention for the same jobs. The Government’s Plan for Jobs includes billions of pounds worth of schemes targeted at providing work placements, apprenticeships, traineeships and careers advice which can support young women. However, the job creation element focuses primarily on construction, manufacturing, and science industries where women are under-represented for a number of reasons.

It is vital that young women are encouraged into work placements and training that will support them to develop the skills they need to be successful at taking advantage of the job creation the government is funding. This means introducing female mentorships, highlighting female role models, encouraging wider support from family and careers services, and providing guidance on how to transfer existing qualifications and prior experience to these growing sectors. However, financial support is also essential to enable women to take up these opportunities. Particularly without childcare support, many women like Katrina will have to juggle caring responsibilities while they are also looking for work or trying to take up training.

Financial instability has an impact on wellbeing, as we discussed in last week’s blog, but research has also shown it can also impact negatively on job performance for young people (CIPD 2017). This should motivate employers to think about financial wellbeing from both a moral and business perspective. While young people most commonly think that receiving a higher wage would help their financial wellbeing, this is just one factor in the wellbeing jigsaw. Alongside paying fair wages there are other actions employers can take; enabling employees to access reliable guidance on managing their finances can help them make better decisions regarding savings, spending, borrowing, and setting realistic lifestyle goals. For young women who are taking on debt or struggling to get by, advice on who to borrow from and how to manage their money and repayments can be instrumental.

As our case study demonstrated, the ability to access childcare is a key factor in enabling women to work, and has been severely affected in the pandemic. We will discuss this further in next week’s blog.

Young Women’s Trust is a feminist organisation working to achieve economic justice for young women.

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The Institute for Employment Studies is a centre for research and evidence-based consultancy in employment and human resource policy and practice.

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Institute for Employment Studies

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The Institute for Employment Studies is a centre for research and evidence-based consultancy in employment and human resource policy and practice.

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