“Women are the shock absorbers of poverty”: The impact of the cost of living on women

Published 26/10/2022   |   Reading Time minutes

The cost of living continues to dominate headlines, with forecasts of a ”bleak” winter ahead. As everyday costs continue to rise, many people across Wales are predicted to experience a drop in living standards, yet the impact will not be felt equally.

Building on previous articles looking at the cost of living, this article examines its impact on women, highlight why women are particularly vulnerable to rises in the cost of living and what action is needed to ensure they receive the support they need.

The rising cost of living: who is most at risk?

The latest report in the Bevan Foundation’s ‘Snapshot on Poverty series’ found that one in five households in Wales with an income below £20,000 often struggled to afford everyday items. In stark comparison, for households with an income of over £30,000, the majority said they have enough money to cover everyday costs. For those households in receipt of benefits the cost of everyday items is a struggle, with 38 per cent of Universal Credit claimants reporting they struggle to afford everyday items.

Some groups within society are more likely to belong to households which have below average incomes, are more likely to experience poverty and are therefore more at risk from rises to the cost of living.

Why are women “more likely to be poor”?

The Women’s Budget Group says that women are “more likely to be poor”. They argue that, because women tend to have responsibility for the purchase of food and the management of “budgets of poor households”, they are the “shock absorbers of poverty”. As a result they say they “have been hit harder by cuts to social security” and due to lower wages and savings, are “less prepared to face the rise in the cost of living”.

Research conducted by the Living Wage Foundation on the state of the gender pay gap, shows “jobs held by women account for almost 60 per cent (59.7%)… of all jobs paid below the Living Wage”. It states that low paid roles in a range of sectors, including care work, the arts entertainment and recreation, accommodation and food services are “predominantly done by women”.

In its Feminist Scorecard 2022, Women’s Equality Network (WEN) Wales and Oxfam state that:

The gender pay gap widened from 11.8% in 2020 to 12.3% in 2021 due to a larger increase in men’s hourly wages. The same is not true across the UK as a whole.

In a briefing paper in September 2022, Chwarae Teg argue that childcare exerts “significant influence over women’s paid work” and often shapes “whether women are in work, the hours they work and the opportunities they have for progression”.

The impact of “she-flation”

While women are more likely to be poorer research suggests they are also more susceptible to spikes in inflation. The Living Wage Foundation refer to “she-flation”, arguing that because women commonly spend more of their income on household goods like food they are “typically more susceptible to inflation-induced volatility”. Part of the increase in the cost of living has been food prices, which have risen at their fastest rate in 42 years; increasing by 14.6 per cent in the year to September.

The New Economics Foundation says that single adult female households will see costs increasing by £1,400 (6% of income) on average compared to £1,110 (4% of income) for single adult male households. This means women are 1.5 times more affected than their male counterparts on average.

Are particular women at greater risk?

For women with other protected characteristics, particularly ethnic minority women, disabled women and for those who are a lone parent, the impacts are likely to be even more severe.

Analysis by the New Economics Foundation finds that:

Single female and black, Asian or other ethnic minority (BAME) households are experiencing costs that are 50% higher than their male and white counterparts (respectively) as a portion of their income.

In Wales, lone parent households were the “family type most likely to be in relative poverty (46%)”. The majority of these households are women.

Cost of living support: do women benefit?

During the past few months both the UK and Welsh Governments have announced several support schemes and one-off cost of living payments which attempts to alleviate some of the financial pressures facing families. Further information about these schemes are available in our cost of living information and support page.

While financial support has been welcomed, there are concerns that not enough targeted support is being given to vulnerable groups, including women and calls for more to be done to prevent inequalities from widening. For instance the Women’s budget group has said that “one-off payments will not be enough to stop millions of households from falling into poverty”. It calls for benefits to be uprated in line with inflation.

Stakeholders call for further action

Both the Women’s Budget Group and Chwarae Teg argue that because women are more likely to rely on social security for a larger part of their income, action needs to be taken to strengthen the system, including an increase benefits to keep pace with inflation.

Chwarae Teg adds that action can be taken in Wales and argue that:

Work should be accelerated to bring together means-tested support schemes into a Welsh benefits system. Consideration should be given to a cost of living helpline to provide a one-stop-shop for advice on all available support, and pressures on household incomes could be further reduced through faster roll out of free childcare for under-2s and action to regulate or freeze rents in the private rental sector.

They also reiterate many of the recommendations made by the Senedd Economy, Trade and Rural Affairs Committee report on the cost of living.

WEN Wales argue that the Welsh Government needs to “take meaningful action to achieve the target to reduce the (full-time) gender pay gap to 7% by 2028”.

Chwarae Teg also warns about the wider harms of the cost of living and says it:

…leaves some women at greater risk of domestic abuse and violence. Financial abuse is not uncommon, and violence against women organisations are already reporting that the crisis is being used as a tool of coercive control and some women are being prevented from leaving abusive relationships as a result.

The cost of living is anticipated to remain an issue throughout the winter and beyond. Stakeholders argue that targeted support is needed to help women and their children cope in the short-term but further action is also needed to tackle the entrenched inequalities which persist.

Article by Claire Thomas, Senedd Research, Welsh Parliament