Rising Employer NICs Place Women in Low-Paid Jobs at Greater Financial Disadvantage
Summary:
- Employer NIC threshold lowered, increasing costs for hiring low-wage workers.
- Women, especially those over 40, are disproportionately affected due to their higher representation in low-paid roles.
- National Insurance changes risk widening the gender pay gap, according to experts.
Experts caution that recent changes in the UK’s National Insurance Contributions (NICs) for employers will disproportionately impact low-paid jobs—a sector primarily held by women. With a shift in NIC thresholds from £9,100 to £5,000, hiring low-paid workers will cost employers an additional 5.4%, compared to just 2.5% for average earners. This change is expected to worsen the existing gender pay gap, particularly for women aged 40 and above, who dominate the low-wage workforce.
Impact on Low-Wage Workforce
According to the Institute for Fiscal Studies (IFS), these reforms could heavily burden industries reliant on low-wage labor, like retail and care, where female workers are the majority. Approximately 59.5% of low-paid roles in the UK are filled by women, amplifying the financial strain on this demographic. The higher costs may deter employers from hiring in these sectors, putting women’s job security at risk.
Gender Disparities in Employment Costs
The NIC changes underscore existing economic gender disparities, affecting not only women’s wages but also employment opportunities in fields that have traditionally served as entry points into the workforce. For women over 40, many of whom have limited career flexibility, this could severely impact income stability.
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The Gender Pay Gap Worsens
These adjustments threaten to deepen the gender pay gap, which recent data shows is still pronounced in the UK, particularly for older female workers. This gap remains a persistent barrier to financial independence and long-term career growth for women in low-income roles, who often lack progression opportunities.
A Call for Policy Revisions
Advocacy groups and economists call for a reevaluation of these policy adjustments, urging the government to consider the broader social impact. Adjustments to employer NICs could offer essential relief to women and other vulnerable worker groups.
Disclaimer: This article is for informational purposes only. While efforts are made to ensure accuracy, readers should verify information and seek professional advice as needed.