Resource Spending Review: Equality and Fairer Scotland Statement

Opportunity/Challenge 1: Support an economic recovery which continues to progress action to tackle structural inequality in the labour market, including through good green jobs and fair work

What does the evidence tell us?

• Groups that have traditionally faced disadvantage and/or are under-represented in the labour market include people experiencing socio-economic disadvantage, young people, minority ethnic people, women, and disabled people. There are barriers to participation in the labour market that result in significant and persistent employment and pay gaps for these groups – in some cases, barriers simultaneously affect certain groups, and therefore actions should be designed to tackle multiple barriers.^[5]
• Barriers related to geography – particularly for those living in island or remote communities – can also lead to significant disadvantage. Scotland faces challenges with respect to deep seated regional inequality in economic activity with many communities in Scotland facing significant social challenges linked to poor economic performance, as evidenced by high levels of deprivation or child poverty in regions with low economic performance.^[6]
• Some sectors – such as tourism, hospitality, retail, culture and the arts, and leisure – were particularly impacted by COVID-19 and the restrictions put in place to control the spread of the virus. Compared to the average, these sectors have lower shares of contractually secure employment and higher shares of the workforce are younger people aged 16 to 24, disabled people and people working part-time.^[7]
• Young people are especially vulnerable to unemployment and long-term employment 'scarring', are more likely to earn less than the real Living Wage,^[8] and are more likely to be financially vulnerable and in unmanageable debt.^[9],[10]
• Disabled people are less likely to be in employment, earn less on average, are less likely to have access to fair work, are more likely to be underemployed, and are more likely to have no or low qualifications.^{[11],[12],[13],[14],[15]}
• Women experience barriers in the labour market that lead them to be paid less on average than men, driving aspects of the gender pay gap and contributing to the existence of child poverty.^[16] These relate to the type of jobs women are more likely to do, how much these jobs pay, and whether women can move into higher-paid jobs.^[17]
• Women were around three times more likely to work in a sector shut down during the pandemic than men, with single mothers with low qualifications being particularly overrepresented in these sectors.^[18] Unpaid housework, childcare, and unpaid care undertaken by women also increased during the pandemic.^[19]
• Mothers suffer a big long-term pay penalty from part-time working, on average earning about 30% less per hour than similarly educated fathers. Some of this wage gap can be attributed to mothers being more likely to work part-time or take time out of the labour market altogether.^[20]
• Minority ethnic workers are more likely to work in some of the sectors most impacted by the pandemic and may be at greater risk of the 'scarring' effects of unemployment.^[21],[22] Minority ethnic people are also more likely to face discrimination when accessing the labour market.^[23]
• The lives of many trans people at work remain difficult, and they face discrimination, bullying and harassment at every stage of employment.^[24] Some trans people find getting into work difficult or challenging, with prejudice and stereotyping having negative impacts on their employment prospects.^[25]

What are we doing to address this?

Securing a stronger, greener, fairer economy is one of the defining priorities of the RSR. The National Strategy for Economic Transformation (NSET) articulates a vision of a wellbeing economy, thriving across economic, social and environmental dimensions. The NSET sets out an aim that, by 2032, Scotland's economy will significantly outperform the last decade, both in terms of economic performance and tackling structural economic inequality, with people at the heart of an economy that offers opportunities for all to succeed and where everybody, in every community and region of the country, will share in our economic prosperity. The NSET identifies five policy programmes, based on analysis of evidence, that are designed to tackle long-term structural challenges, build on our economic strengths, and position Scotland to maximise the greatest economic opportunities of the next ten years.

Within the NSET, the Fairer and More Equal Society Programme aims to reorient our economy towards wellbeing and fair work, to deliver higher rates of employment and wage growth, to significantly reduce structural poverty, particularly child poverty, and improve health, cultural and social outcomes for disadvantaged families and communities. Examples of commitments in the strategy that will help achieve these aims, tackle discrimination, and help advance equality and human rights include:

• Delivering on the commitment to require payment of the Real Living Wage in Scottish Government contracts from October 2021.
• Simplifying the employability system by implementing No One Left Behind, including building on the principles of the Young Person's Guarantee to develop an all-age guarantee of support for those most disadvantaged; and supporting parents to increase their incomes from employment as part of cross government action set out in the Best Start, Bright Futures: Tackling Child Poverty Delivery Plan 2022-2026.^[26] This activity will initially be supported by almost £113 million investment in 2022-23, of which £81 million is targeted towards tackling child poverty through an offer to parents.
• Taking further steps to remove barriers to employment and career advancement for disabled people, women, those with care experience, and people from minority ethnic groups through relevant action plans and strategies, including sectoral strategies.
• Providing an efficient and resilient digital infrastructure including through continued investment in improved broadband and mobile coverage for residential and business premises. Enhancing the resilience of digital infrastructure through direct international links to the internet and the development of data centres aligned with renewable power sources.

For further details of actions to address inequality in digital participation, see Opportunity/Challenge 4.

To advance understanding of equality and human rights issues and embed them within the policymaking process, the NSET has committed to establish a Centre of Expertise in Equality and Human Rights to work across the Economy portfolio within the Scottish Government, as agreed in the Economy Recovery Implementation Plan.^[27] To build on Scotland's leading work on integrating wellbeing into its measurements and policy development and monitor how we are performing as a wellbeing economy, we will publish a Wellbeing Economy Monitor. This will look beyond standard economic indicators such as productivity and employment rates to also incorporate measures such as fair work indicators, financial security, child poverty, and greenhouse gas emissions. We will also publish an annual progress report from the NSET Delivery Board to enhance public accountability, and this report will include equality monitoring.

The RSR acknowledges that action and investment from all parts of government is required to deliver on our future plans in a greener and fairer way. However, government cannot and should not do everything on its own and, active collaboration with national and regional partners across the private, public and third sectors will be crucial for realising Scotland's ambitions. The RSR acknowledges that we must make smart choices about investment in tackling child poverty and addressing the climate crisis, in order to deliver a stronger, fairer, greener Scotland.