Two birds with one stone
Clare discusses the impact of low wages on the care sector in the UK and how a pay increase will not only help the social care staffing crisis, but also local economies.
Levelling up through social care sector pay rises
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The need for reform within the United Kingdom’s (UK) adult social care sector is indisputable. A national conversation is essential to determine how the nation funds and structures the social care sector. Regardless of what is ultimately decided, the sector requires a labour force that is sufficient to meet the UK’s growing need for social care.
Any restructuring of the social care sector will need to address its existing staffing deficit, which in 2019–2020 stood at over 100,000 unfilled vacancies, or 6–7% of the entire workforce. Unless something is done, this staffing crisis is set to increase: it is estimated that the sector will require an additional 490,000 staff by 2035 to meet the demands of increasing morbidity within an aging population.
“The sector will require an additional 490,000 staff by 2035 to meet the demands of increasing morbidity within an aging population.”
What accounts for the social care staffing crisis? Simply put, other sectors of the economy—such as retail—provide better wages, working conditions, and more opportunity for career progression in roles that require far less responsibility. Although social care can be incredibly rewarding, it involves long hours of physically and emotionally demanding work, placing the responsibility of administering medication, providing personal care, and managing the welfare of some of the most vulnerable members of society onto overstretched staff. The median value assigned to this work is £9.01 per hour*, and 72% of care workers are paid less than the ‘real living wage’—pay that is commensurable with the cost of living.
Increasing wages is not only a moral obligation but also a practical necessity. The ongoing Heavy Goods Vehicle driver shortage in the UK demonstrated that increasing wages can surmount recruitment challenges for roles that were previously viewed as less desirable. However, while the private sector was able to swiftly raise wages to make these roles more appealing, the care sector cannot do the same.
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“Increasing wages is not only a moral obligation but also a practical necessity.”
Profit margins are narrow in the social care sector, and with staffing costs being the greatest expenditure, there is little leeway for providers to increase wages. Similarly, it is difficult for the sector to increase its revenue as care providers are typically commissioned by local authorities. Moreover, austerity and funding cuts have further stretched local authority budgets, meaning that the maximum threshold councils are able to pay for social care is insufficient to raise staff wages. The sector is thus unable to adjust for the disparity between the demand and supply of the social care labour force itself, and requires government intervention and financing to offer higher wages and encourage recruitment.
In-work poverty in the UK is rising with dire consequences. In the social care sector, low wages meant that many care staff could not afford to isolate during the early stages of the pandemic. It doesn’t take much to consider the broader consequences of these poverty wages on the health and wellbeing of social care staff. Government intervention to ensure that social care staff receive at least (but preferably above) the real living wage would reduce poverty, and improve the living conditions of employees—particularly those who live and work in cities with high living costs.
Higher wages for social care workers in more deprived areas would have additional benefits for local economies. The demand for social care is likely greater in these areas as a result of higher morbidity rates. Therefore, paying social care staff enough to provide them with a moderate amount of disposable income could inject much-needed capital into more deprived communities. Increased expenditure by social care staff would stimulate the local economy, providing opportunities for local businesses to grow and to hire new staff. Thus, increased spending by social care staff will lead to greater economic growth and rejuvenation of local communities.
“Increased spending by social care staff will lead to greater economic growth and rejuvenation of local communities.”
Opponents of this proposal are likely to argue that increasing wages of care staff would require wage increases for all other staff in the health sector and point to the considerable amount of government spending required to do so. However, as health sector employees have experienced significant real-term pay cuts since 2010, a public sector pay rise is arguably long overdue. To which the question remains: how do we pay for a large public sector pay rise?
An increase in health and social care sector wages need not trigger immediate tax hikes. Instead, increasing wages should be viewed as an investment in local economies which currently experience high levels of unemployment and deprivation—local economies which previously thrived owing to the well-paid jobs provided by large-scale manufacturing plants. However, the opportunity to exploit cheap labour elsewhere has made it financially unappealing to continue to manufacture goods in the UK and many of these jobs have been lost as a result. Governments frequently offer tax breaks and incentives to entice large scale employers to establish themselves somewhere, with expectation that the employment provided by these firms would provide the surrounding area with economic stimulus.
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Some communities—like those in the South Wales Valleys—have experienced successive waves of employment and unemployment arising from the repeated opening and closing of such factories. Instead of unpredictable cycles of employment and redundancy, local communities need a sustainable source of large scale, well-paid employment that requires few formal qualifications. Given that the care sector can provide this, costs to the taxpayer of increasing their wages would be offset in the long-term by the increase in local prosperity. If there are few qualms in providing private tax breaks and financial incentives to large companies to set up shop in the UK, why should there be any resistance to increasing care sector employee wages through similar means?
“If there are few qualms in providing private tax breaks and financial incentives to large companies to set up shop in the UK, why should there be any resistance to increasing care sector employee wages through similar means?”
Boris Johnson’s government has been vocal about their desire to “Build Back Better” and “level-up” the nation—slogans intended to affirm the government’s commitment to “reduce inequality between places while improving outcomes across all places” in the UK. The use of this rhetoric has even resulted in the government renaming the ‘Ministry of Housing, Communities, and Local Government’ the ‘Department for Levelling-Up, Housing, and Communities’. However, the contents of the Autumn 2021 Budget along with the recent decision to increase employee’s National Insurance tax does not demonstrate a real commitment to tangibly reducing inequalities. Much like the lack of substantive plan to fix the social care crisis, the verbal commitment to addressing health inequalities may also be bluster. However, if the government were serious about addressing both issues, they could kill two birds with one stone by increasing funding for local authorities to earmark for social care sector wages: increasing health and care sector wages would improve living conditions, while also levelling up local economies in deprived communities.
* The government’s national minimum wage for anyone over the age of 23 is currently £8.91; however the real living wage (the amount someone needs to live on) is set as £9.90 across the UK and £11.05 in London.