The Resolution Foundation calls for higher pay and better conditions for low-paid workers
03 June 2020
The Resolution Foundation has published a report which highlights how the UK’s 4.2 million low-paid workers have been impacted most negatively by the outbreak of coronavirus. Whether that be because it is significantly more likely that they have lost their jobs or been placed on furlough than higher earners, or because they are in roles that have meant prolonged exposure to the danger to health posed by COVID-19.
Whilst key workers have been praised by both government and the public throughout the duration of the coronavirus crisis, attention has been turned to the low pay and unfavourable working conditions that they have to endure. It has been highlighted that copious amounts of key workers are paid below the real living wage, with many more who, in reality, are paid below the mandatory minimum wage.
Whilst the Resolution Foundation applauds the introduction of, and subsequent increases to, the National Living Wage (NLW), and states that the NLW should continue to rise as per the government’s intention of reaching two thirds of median earnings by 2024, it believes that wider progress, outside of the NLW, is required for those in low paid roles. This relates to better-quality work, and includes the fact that they should be treated with both dignity and respect at work, to the same degree as those working in higher-paid jobs.
The report highlights the following issues faced by low-paid workers:
- Pay inadequacy – over half of care workers are paid below the real Living Wage. Up to 160,000 aren’t paid the legal minimum wage
- Work uncertainty – Low-paid workers are more likely to feel anxious about work uncertainty with 1.2 million workers reporting last-minute changes being made to their work shifts which has resulted in a loss of pay
- Financial insecurity – Less low-paid workers are paid weekly, with 744,00 workers being moved from weekly pay to monthly pay, with no discussion or debate
The Foundation urges government to remember the individuals who have guided the country through the crisis, and kept it afloat, and to set out a new settlement for low-paid workers. The settlement should include:
- Giving workers more control over the hours they work – this should include a contract that shows the actual hours they work, and an entitlement to compensation if shifts are cancelled without sufficient prior notice
- Helping to address financial insecurity – large firms should allow workers to choose how regularly they are paid – e.g. weekly / monthly
- Reducing job insecurity – The qualifying period for unfair dismissal should be reduced from two years to one
- Ensuring that these new rights are upheld – through a Single Enforcement Body. This is something that has been discussed at length as part of the ‘Good Work Plan’
- Establishing new wage boards – in industries where standards must be raised, new wage boards should be established, consisting of employers, employees and independent representatives. The Foundation recommends that this starts in social care
Economist at the Resolution Foundation, Hannah Slaughter, 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.”
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.