The Covid-19 crisis has demonstrated how much we all owe to healthcare staff, care workers, retail and delivery workers, public transport workers, teachers and support staff, energy workers and so many others. Despite this, millions of key workers remain underpaid and in insecure work.
The TUC estimates that 6 million key workers stand to benefit from public sector pay increases and planned minimum wage increases. Both these levers are directly within the government’s control. But there are signs that pay increases may not materialise.
The government can also put an end to some of the worst cases of insecure work by banning zero-hours contracts, which affect many who have been on the frontline of the crisis. They must not let key workers down.
We believe the minimum wage should be set at least £10 an hour for all workers, which would improve the pay of 3.6 million key workers.
The Low Pay Commission recently consulted on an increase to £9.21 an hour. TUC analysis shows that 2 million key workers would benefit from this proposed increase, with 1.5 million of them in the private sector.
However, there have been calls from business groups to keep the minimum wage even lower than this level. This has put pressure on ministers and officials to apply an “emergency brake” which would slow down increases in the minimum wage. The TUC believes that rowing back on a planned pay rise for 2 million key workers would be the wrong decision.
Recent increases in the minimum wage have demonstrated there is room for a more ambitious wage floor. Up until the Covid-19 crisis, employment increased alongside increases to the minimum wage. This lines up with international evidence which shows “a very muted effect of minimum wages on employment, while significantly increasing the earnings of low paid workers.”
An increase in the main minimum wage rate to £9.21 would raise the pay of 2 million key workers.
These economic circumstances are challenging for many businesses and many firms will face difficult choices. But without wage protections we know it is often low paid workers who suffer – while shareholder dividends and executive pay continue to rise. We are not in a crisis caused by wages that are too high, nor in one that can be resolved with lower wages.
Public sector pay
Public sector workers make up 52 per cent of key workers. Following a decade of real terms pay losses due to cuts and pay restraint, public sector workers deserve serious pay increases which reward them for their sacrifices during the pandemic and set them on track to recover the pay they have lost over the past ten years. Increasing pay for all public sector key workers would give a pay rise to 4.4 million people.
Since 2010, public sector pay has fallen behind the cost of living as the intentional result of government policy. As a result, average public sector pay is still £900 lower today in real terms than it was in 2010. In other words, once the cost of living is taken into account, public sector workers are earning less today than they were ten years ago. For many, the loss in pay is more than £900 per year. For example, in real terms:
Nurses and community nurses (NHS band 5) are more than £3,000 worse off today in real terms than they were in 2010.
Residential care workers employed by local government are nearly £1,900 worse off in real terms.
Ambulance services drivers are £1,605 worse off in real terms.
The government recently announced a pay rise for public sector workers but left out some of the most essential workers including social care, local government, nurses and other NHS staff, and low paid civil servants. Just hours after the pay announcement, it emerged that the Treasury had urged government departments to ‘exercise restraint in future public sector pay awards’. Following a decade of real pay cuts, key workers in the public sector deserve better.
The government needs to ensure all key workers are paid the true value of their work and earn enough to get by.
The government also needs to take action to stamp out insecure work. Our analysis finds that 1 in 9 UK workers are in insecure work, such as zero-hours contracts, agency, casual, seasonal work or low paid self-employment. Many of these workers are key workers who have been on the frontline of the Covid-19 crisis.
For the first time on record, the number of people on zero-hours contracts has risen to over a million. This is driven by their proliferation in essential industries like health and social care, and wholesale and retail.
One in four workers in adult social care – one of the sectors hit hardest by the virus – are on zero-hours contracts, which means their hours of work and pay packets can vary significantly.
The government needs to ban zero-hours contracts to protect key workers from some of the worst excesses of insecure work.
Treating key workers fairly
The government needs to
raise the minimum wage to improve the pay of 2 million key workers
give meaningful pay rises to over 4 million public sector key workers
ban zero-hours contracts which particularly affect key workers in health and social care, and wholesale and retail
It is time to end the low pay and insecure work that leave carers, supermarket workers, delivery drivers and many more of our most essential workers struggling.
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