Labour market enforcement
Low pay

A new settlement for the low paid

Beyond the minimum wage to dignity and respect

This crisis is shared, but its burden is not. From health risks to job losses, it is the UK’s 4.2 million low-paid workers on whom this pandemic has imposed the greatest cost, and of whom the efforts to combat it have required the greatest sacrifice. Lower earners are three times as likely to have lost their job or been furloughed as high earners, and are more than twice as likely to do jobs exposing them to health risks.

It is not by anyone’s design that our lowest earners have suffered the most, but it is for the public and policy makers to recognise where the burden has lain. To date, that is what they have done, with politicians of all parties praising key workers from care homes to supermarkets, and the public expressing their gratitude each Thursday night. Rightly, debate has turned to the low pay and insecure conditions of such workers. Half of frontline care workers are paid less than the real living wage, while estimates of those paid below the legal minimum wage vary between 20,000 and 160,000. Delivery drivers are regularly forced into self-employment, missing out on sick pay and the minimum wage. In 21st century Britain, an employer can cancel a shift for a zero-hours contract worker who has already paid for a train fare to get to the job.

Predicting what change will follow this pandemic is fraught with difficulty, but there are grounds for hope that the time has come for a significant re-evaluation of the approach we take as a society towards lower-paid workers. This is because it would be building on trends under way pre-crisis that saw public and political concern about the quality of such work move centre stage over the past decade.

A much higher minimum wage has been the main result, with the introduction of the National Living Wage leading to the share of the workforce that is low paid falling to 15 per cent last year, the lowest level in four decades. Post-crisis, further increases in the minimum wage should continue, with the aim of abolishing low pay by the middle of this decade by raising the National Living Wage to two thirds of typical hourly pay. But the lack of wider progress in improving the world of low-paid work stands in stark contrast to the forward leaps on the minimum wage. Talking about better-quality work for the low paid did not translate into actually creating it, pre-crisis. Post-crisis it could, and it should.

This paper sets out a significant yet achievable programme of change across five areas that, taken together with a higher minimum wage, would amount to a new settlement for Britain’s low-paid workers. At its core is the idea that improving the circumstances of low-paid labour is not just about a higher price tag for that labour, but about showing respect to and providing dignity for the people doing it. Who has control of decisions, or whether low-paid workers are treated in a similar way to higher-paid ones, are central questions that we should pay attention to.