Fair Work Action Plan 2022 and Anti-Racist Employment Strategy 2022: equality impact assessment

4. Evidence and key issues

This section provides an overview of evidence and key issues relevant to the Scottish labour market and protected characteristic groups. A detailed evidence and key issues section is provided in Appendix D.

4.1 Population change

The latest estimate of the Scottish population is 5,479,900.^[31] The population has grown 0.25% since mid-2020, which is 0.17 percentage points lower than the average annual growth from mid-2014 to mid-2019^[32].

Contrary to previous years, population growth was recorded in many rural council areas while the population in the largest cities fell. For some rural regions, this year reversed a trend of population decline, such as Aberdeenshire and Argyll and Bute. While for other rural areas such as Highland and Perth and Kinross, which had seen steady growth or small decreases in recent years, the rate of growth increased^[33].

4.2 Labour market statistics

• The employment rate in Scotland has fluctuated since 2004, experiencing a steep decline in employment between 2008-2012 in line with the recession and between 2019-2021 in line with Covid-19. The unemployment rate figures peaked at 8.3% in 2011 and have fluctuated since 2017 to 3.9% in 2021.^[34]
• In 2022, 91.0% of all employees (18+) were paid the real Living Wage in 2022. Sectoral analysis reveals that over 80% of private sector employees were paid at least the real Living Wage and over 90% of public and third sector employees. A higher percentage of men have been paid the real Living Wage compared to women between 2012 and 2022.^[35]

• While disaggregated data for Scotland is not available, the percentage of people in zero hours contract employment in the UK has been on the rise since Oct-Dec 2020 from 3.1% to 3.4% in Oct-Dec 2022.^[36]

• Scottish Government (SG) diversity and inclusion workforce estimates for 2021 reveal that disabled and ethnic minority staff members are underrepresented in the government workforce and were paid less than counterparts.^[37] While Women and LGB+ groups are overrepresented within the workforce and transgender staff experienced higher levels of discrimination.

4.3 Protected Characteristic Groups

4.3.1 Key issues: older people

• The employment rate for 50 to 64-year-olds experienced the largest annual reduction across all age groups, from 70.5% in 2019 to 68.1% in 2021.^[38]
• Scotland has an ageing population who disproportionately experience job insecurity, redundancy, and undervalued skills in the labour market as a result of ageism. ^[39]
• Low-income women over 50 who were single or divorced were more likely to experience cumulative negative effects of insecure labour markets, caring responsibilities, and health problems.

4.3.2 Key issues: young people

• The estimated employment rate for young people (aged 16-24) in Scotland was 54.0% in Jan-Dec 2021, sitting lower than the rate recorded before the Covid-19 pandemic.^[40]
• During the pandemic, young people were overrepresented in affected sectors and disproportionately experienced unemployment and higher rates of furlough than all other age groups.^[41]
• Young people (16 to 24 year olds) across the UK are overrepresented in zero hour contracts (11.7% in Oct-Dec 2022)^[42] and 18 to 24 year olds are less likely to be paid the real Living Wage.^[43]
• Young women have a higher employment rate than men (55.2% and 52.8% respectively).^[44]

4.3.3 Key issues: disability

• Disabled people experience a large employment rate gap in the labour market. Despite reducing from 37.4 percentage points in 2016, the disability employment gap was still 31.2 percentage points in 2021.^[45]
• Young disabled people are particularly at risk of unemployment when transitioning from school to further education, apprenticeships, or work and represent a lower proportion of higher education entrants than non-disabled people.^[46]
• Disabled people disproportionately experienced the long-term social and employability impacts of Covid-19, reporting low well-being and high levels of loneliness. Disability was also identified as one of the most significant factors influencing a person's return to work following the Covid-19 pandemic.^[47]

4.3.4 Key issues: gender reassignment

• Transgender or gender non-conforming people may have concerns about accessing employment for fear of being harassed or discriminated against, as one of the five protected characteristic groups covered by the hate crime legislation.

4.3.5 Key issues: pregnancy and maternity

• Pregnant women may experience discrimination during pregnancy and when returning from maternity leave, including job insecurity, exclusion from opportunities and dismissed working adjustments.^[48]

• Women living in deprived areas were more likely to experience short and long-term health problems as a consequence of childbirth, which could extend maternity leave and ultimately exacerbate existing barriers to returning to work for those most at risk to poverty.

• Racialised minority maternities were overrepresented in the most deprived areas, increasing the risk of racialised minority women to maternal disadvantage in the labour market.

4.3.6 Key issues: race

• The employment rate of the white population consistently exceeds that of minority ethnic populations; in 2021, the ethnic employment gap was 11.7 p.p.. In particular, young ethnic minorities (aged 16-24) experienced the largest gap in 2021 at 19.6^[49] p.p., and the ethnic employment gap was significantly higher for women than men in 2021.^[50]
• In 2022, the ethnicity pay gap was 10.3% in 2019.^[51]
• Minority ethnic women are more likely to be employed in part time and insecure roles and have been 'left behind' in pay gap progress.^[52]
• Ethnic minorities disproportionately faced unemployment during the Covid-19 pandemic due to their high representation in low-paid work in 'shut down' sectors, such as hospitality and key workers.

4.3.7 Key issues: religion or belief

• Religious groups may have concerns about discrimination, assault or harassment in employment as one of the five protected characteristic groups covered by the hate crime legislation.

4.3.8 Key issues: sex

• In 2021, the gender employment rate gap was 5.1 p.p.. The employment rate for men is higher than for women across all age groups, except for those aged 16 to 24.^[53]
• The gender pay gap for median hourly earnings (excluding overtime) in Scotland has been lower than the UK since 2003 and has typically been reducing over time to 12.2% in 2022.^[54]
• In Oct-Dec 2022, women across the UK also represented a higher proportion of employees on a zero-hour contract, at 3.9% compared to 3.0% of men,^[55] and in 2022 92.5% of men were earning the real Living Wage compared to 89.7% of women.^[56]
• In 2021, 43% of young women felt they did not have equal access to work,^[57] which can be attributed to women's disproportionate risk of gender discrimination in recruitment, promotion opportunities and pay as well as occupational segregation.
• Women disproportionately carry out unpaid caring responsibilities which may minimise availability for paid employment, restrict career choices and limit locations of employment while significantly impacting women's personal wellbeing.^[58]
• Intersectional labour market inequalities are identified for young women, racialised minority women, disabled women, and women with caring responsibilities.
• The Covid-19 pandemic disproportionately impacted young women's job security, career development and mental health.

4.3.9 Sexual orientation

• LGBT groups may have concerns about accessing employment for fear of being harassed or discriminated against, as one of the five protected characteristic groups covered by the hate crime legislation. When it comes to accessing services, one out of every four people has experienced discrimination.^[59]

4.4 Deprivation

• According to the SIMD in 2020, the most deprived data zones tend to be focused around urban areas and their suburbs and tend to accommodate more people with a long-term limiting condition.^[60] In the most deprived areas in Scotland, 48% of adults live with a limiting condition while only 25% of adults live with a limiting condition in the least deprived areas.^[61]

4.5 Poverty

• In 2017-2020, 17% of Scotland's population were living in relative poverty before housing costs and 19% after housing costs.^[62] Protected characteristic groups are most at risk to relative poverty, particularly young people, single mothers, racialised minority groups and households with a disabled member.
• The latest records (2017-2020) estimate that 21% of children were living in relative poverty before housing costs and 24% after housing costs.^[63] Groups at greater risk of child poverty include single parent households, racialised minority households, three or more children households and disabled household members.
• In 2017-2020, relative poverty stood at 16% before housing costs and 19% after housing costs. In terms of child poverty, two thirds (68%) of children experiencing relative poverty after housing costs live in working households while only 32% live in workless households.
• Evidence reveals that racialised minority communities face a poverty trap of low paid employment and racialised minority households have 10 times less 'wealth' than British households in terms of savings or assets.^[64]
• The cost-of-living crisis has generated precarious financial situations for two-thirds of unemployed households and 70% of single parent households who have either no savings or under £250. Other households are behind on rent or mortgage payments and have had to cut back on essential items.