Low-paid workers deserve a post-pandemic settlement of higher pay and greater control over their work

RF calls for new wage boards to drive up standards in problem industries

A new settlement for low-paid workers, hardest hit by both health and economic risks in this crisis, should be introduced to improve their pay and conditions as Britain emerges from the crisis, according to a new report published today (Wednesday) by the Resolution Foundation.

The report notes that the UK’s 4.2 million low-paid workers have been at the heart of the current economic crisis. The lowest earners are three times as likely to have lost their job or been furloughed as high earners, and more than twice as likely to do jobs exposing them to health risks.

And while policy makers and wider society are recognising that we all rely on these workers, they have still had to endure inadequately low pay and unnecessarily high job insecurity both during, and also long before, this pandemic.

The report notes several ways in which low-paid workers are poorly treated in 21st century Britain, including:

  • Pay inadequacy. Over half of the care workers that are clapped every Thursday are paid less than the real Living Wage (currently £9.30 an hour outside London). Up to 160,000 aren’t even paid the legal minimum wage.
  • Work uncertainty. 1.2 million workers report experiencing last-minute changes to their work shifts, three-quarters of whom say that these changes have meant a last-minute loss of pay. Low-paid workers are disproportionately likely to feel anxious about this work uncertainty – including two-in-five workers in sales and customer services roles, and over one-in-three workers in cleaning, caring and other service occupations.
  • Financial insecurity. Over the last two decades the number of the lowest paid workers being paid weekly has more than halved from 44 per cent to just 17 per cent, equivalent to moving 744,000 workers from being paid weekly to monthly. This shift has received no discussion or debate, despite it being the equivalent of the lowest paid workers on average lending their employers an extra £120 million.

The Foundation says that as the Government looks to rebuild Britain’s post-pandemic economy, it should remember those who have steered the country through the crisis, and set out a new settlement for low-paid workers.

The new settlement, which would build on the Government’s welcome commitment to abolish low pay by the middle of the decade, should include:

  • Giving workers more control over the hours they work with a right to a contract that reflects the actual hours they work, and a right to compensation where shifts are cancelled without reasonable notice;
  • Helping to address financial insecurity with a right to choose how regularly you are paid in large firms;
  • Reducing job insecurity by cutting the qualifying period for unfair dismissal to one year (as the current two-year qualifying period excludes one-in-three low paid workers);
  • Ensuring that these new rights are upheld through a properly resourced Single Enforcement Body, with powers to pro-actively protect workers; and,
  • Establishing new wage boards made up of employers, employee and independent representatives in those industries in clear need of standards raising, starting in social care.

Hannah Slaughter, Economist at the Resolution Foundation, said:

“Britain’s low-paid workers have been at the heart of the current economic crisis. They are the most likely to have lost their jobs, or to have put their own health at risk by working on the frontline.

“The appreciation now being expressed for these workers is in stark contrast to the fact that for too long we have offered them a world of work based on insecurity and exploitation, not dignity and respect.

“Britain’s post-pandemic economy will look different from the one before coronavirus hit. For low earners that should be because the government has put in place a new settlement, based on more respect, higher pay, and better conditions at work.

“New wage boards should drive up standards in problem industries, while workers need to be given more control of the hours they work and when they are paid. Rights must not only be strengthened but enforced. These are balanced, moderate proposals, that taken together would amount to a new settlement for low-paid workers.”