‘How women are key to economic growth’
The rise of working women has been a critical factor in raising living standards of low to middle income households in the last 40 years, according to new research out today.
It is the first major study breaking down the factors which drove household income growth over recent decades.
It found that over one quarter (27%) of all income growth for these households came from women’s work, with only 8% from men. In 1968, 86% of household gross employment income in this group came from men and 14% from women; by 2008, 63% came from men and 37% from women.
Researchers say that growing the incomes of women will be key to economic growth and powering the economy again, since they have been hit the most.
The research was conducted by the Institute of Fiscal Studies for the Resolution Foundation think-tank.
Gavin Kelly, chief executive of the Resolution Foundation said
This report shows the massive contribution of working women to the incomes of hard-pressed households, as well as the growing role of tax credits. But given female employment has now flat-lined – and with cuts to tax credits and less support for childcare – it’s not obvious how families are going to raise their incomes in the future.
From 2002 to 2009, women’s employment income raised household incomes by £301 and tax credits by £581 (in 2008/09 pounds). But these gains were largely cancelled out by big losses from other sources, most notably male employment income, which reduced incomes by £610.
This meant that overall, incomes in low to middle income households rose in real terms by an average of only £143 from 2002 to 2009.
Mike Brewer, co-author of the report said
This report shows the big changes in where working households’ income has come from over the past four decades. In the late 1960s, low-income working households were more reliant on the main earner than better-off households: these households had a low income partly because they had only one earner. But by the 2000s, before the recession, low-income working-age households were slightly less reliant on the main earner than better-off households.
The report also illustrated the importance of Labour’s tax credits. It shows that tax credits accounted for around one sixth of the total rise in household income among the low to middle income group since 1968, despite the fact that their major expansion took place in the past 10 years.
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Women can do all of my work if they want to.
Good piece, bad title (a group making up half the adult population is important to the economy? Who’da thunk it?).
By the way, this: “these gains were largely cancelled out by big losses from other sources, most notably male employment income, which reduced incomes by £610″ is probably (mainly) a direct consequence, not a regrettable side factor. You’re less likely to need to work overtime or do a well-paying job that you hate if your partner is also bringing in a decent wage. In other words, it’s probably largely a good thing. Although total employment figures will also be a factor.
“Researchers say that growing the incomes of women will be key to economic growth and powering the economy again, since they have been hit the most.”
Have they? I understood that the recession hit men hardest and the resulting government policies hit women hardest, but I wasn’t aware that one gender or the other was made significantly worse off overall. I’d be interested to see data on this.
I understood that the recession hit men hardest and the resulting government policies hit women hardest, but I wasn’t aware that one gender or the other was made significantly worse off overall.
I think that’s right – private sector job losses disproportionately affected men, the so-called ‘Mancession’ ugh, but subsequent retrenchment in the public sector has affected women more, because more women work there.
It’s an artefact of the fact that to get the *basics*, both partners need to work in poor households.
Does this take account of the shift from manufacturing/heavy industry to services?
From 2002 to 2009, women’s employment income raised household incomes by £301 and tax credits by £581 (in 2008/09 pounds). But these gains were largely cancelled out by big losses from other sources, most notably male employment income, which reduced incomes by £610.
Sorry? You mean people would be better off if women were not working but staying at home? Can someone please explain to me how encouraging women to work can “destroy” twice as much value as they produce?
If this is true, and I find it hard to believe, we would all be better off encouraging women to stay at home. Children would be better off. Men would earn a lot more than their wives would if they worked. Women say they don’t want to work as much as they do and would rather stay at home. Seems there is a win-win here. Tax credits for stay-at-home mothers is the way to go.
@6 – So, you misread the figures and then call for women not to work. No shockers there.
@ 6 SMFS
“Sorry? You mean people would be better off if women were not working but staying at home?”
Firstly, £301 + £581 > £610. So, no.
Secondly, it doesn’t say that the reduction in male income was entirely due to women working. It doesn’t actually say that the latter had any effect on the former at all, although I’d assume that it had a fairly hefty one.
Remarkably, the OP describes a UK economic scenario without recognising that there is a world beyond the UK, without even mentioning UK.
8. Chaise Guevara
Firstly, £301 + £581 > £610. So, no.
Money does not fall from the sky. Nor does it grow on trees. It is not free. If you get it in the form of tax credits, it means someone has to pay it. That was not counted in their analysis of well being and so I ignored it too. Because what counts is that women in work managed to produce 301 pounds worth of economic production. While destroying 610. That is a remarkable figure that is so unusual it can’t be true.
Suppose we gave them tax credits for staying home. Then we would gain 1191 pounds worth for each household. That seems to be the best outcome for all concerned. Especially as women frequently report wanting to work less, look after their children longer and stay at home. While children do vastly better with a full time mother at home as well.
Secondly, it doesn’t say that the reduction in male income was entirely due to women working. It doesn’t actually say that the latter had any effect on the former at all, although I’d assume that it had a fairly hefty one.
OK. I will agree to that. There may be some other change going on in the economy which is also depressing male wages. Not hard to imagine what it is either. Although of course an honest discussion about immigration is unlikely any time soon. So we should reverse both the changes, whatever the second is, and the poor in Britain would be a lot better off.
@ 10 SMFS
“Money does not fall from the sky. Nor does it grow on trees. It is not free. If you get it in the form of tax credits, it means someone has to pay it. That was not counted in their analysis of well being and so I ignored it too. Because what counts is that women in work managed to produce 301 pounds worth of economic production. While destroying 610. That is a remarkable figure that is so unusual it can’t be true.”
As we’ve already agreed, it already certainly isn’t.
“OK. I will agree to that. There may be some other change going on in the economy which is also depressing male wages. Not hard to imagine what it is either. Although of course an honest discussion about immigration is unlikely any time soon.”
It’s not going to be one single other factor. There’ll be all sorts of stuff. Perhaps, with the ongoing rise of call centres and the like, the workplace is shifting towards a greater number of de facto working-class jobs (e.g. office roles that require little or no qualifications, experience or former training, which tend to pay a bit better than stacking shelves but still well below median pay). Perhaps a more challenging job market is depressing wages both directly (by creating a buyer’s market) and indirectly (making people more frightened to ask for a pay rise or fight for better conditions). And so on.
Also, while you could argue that it’s impossible to have an honest argument about ANYTHING at a national level, immigration hardly stands out in this respect.
“So we should reverse both the changes, whatever the second is, and the poor in Britain would be a lot better off.”
No. Oppressing half of the population is not justified by a smallish predicted rise in household incomes. We could probably raise incomes a lot by introducing slavery, but we don’t. Actions, even those with positive effects, have CONSEQUENCES – something you’re in the habit of conveniently forgetting when you want to make one of your trademark simplistic blanket statements.
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