Covid-19 has exposed growing divisions in the working world. Structural problems in the UK’s labour market are at risk of exacerbating the impact of Covid-19 on frontline service and care workers and must now be addressed in a comprehensive package.
The budget gave the biggest fiscal boost to the UK economy in 30 years. Yesterday the Chancellor announced additional financial measures valued at £330 billion aimed at small businesses caught in the teeth of the coronavirus lock down.
This boost is welcome but Covid-19 has exposed some significant gaps in the level of security and well-being afforded to different classes of worker. In particular, more than 2 million workers in the UK, many of whom are self-employed or work on insecure contracts, are excluded from the statutory pay scheme.
Direct, comprehensive support for our workforce is integral to mitigating profound impacts of Covid-19 on the economy. Analysis at IFOW shows that raising the floor of basic protection - including sick pay - for working people would support the country’s economic resilience.
Coronavirus has revealed the inequality between ‘good’ jobs which are well-paid, secure, and fulfilling, and insecure, low-paid, contract work in the service and care sectors which is not even covered by sick pay.
The UK has had a disproportionate growth in self-employed and non-standard employment. One in 7 people in the UK does not have an employment contract with a sick pay scheme that beats the £94.25 a week statutory minimum. Conversely, job opportunities for mid-pay and skilled managerial and operative work have declined. This has gone hand-in-glove with a rise in relative inequality of income and wages across the UK, with the most recent ONS analysis showing incomes for the poorest households falling again by over 4%.
This is behind an increased sense of social and economic insecuritythat our research has found is felt by those in work – a sense that has now shown to be justified.
It’s a double blow that many of the workers at the sharp end of the UK’s labour polarisation are required to have higher levels of human contact and cannot do their jobs remotely. Many service sector and care workers must continue in work where social distancing is impossible. They’re needed more than even to sell or deliver food and medicine, or to tend to the young and elderly, but this will increase risk of early exposure to Covid-19.
Worse, these lower-paid workers are themselves more likely to live in areas with lower levels of economic and health resource. It’s not a coincidence that 81% of low-paid caring, leisure and ‘other service’ occupations are done by women. It’s the life expectancy of the poorest 10% of women that has taken the biggest hit, as the Health Foundation’s recent Marmot Anniversary Review highlighted. It’s not right, or helpful, that the UK’s most vulnerable workers are being forced to choose between health and income.
Taken together, this means the systematic risk of the pandemic to a low paid, contract retail or care worker and family is likely to be higher than to a highly-paid, educated office worker who can work remotely. For these workers, the impact of Covid-19 may be faster, or more intense and enduring. And once struck, sick pay is less likely.
The government must act quickly.
First, they should introduce sick pay and income support for all, including those working on insecure contracts. Like Norway, this should extend to full pay rate for a minimum of 20 days, with the self-employed receiving 80% of their average income over the last 3 years. The UK’s minimum pay of £94.25 should be raised to reflect a reasonable minimum living wage. Businesses will need additional support for this purpose.
Carers of Covid-19 patients, including unpaid carers, should receive the living wage. New risks mean that, as a society, we need to revalue caring work involving high levels of human contact.
Covid -19 shows up the particular proximity of work to health, as challenges such as sick pay demand a co-ordinated, cross-department approach to maximise the chance of a swift recovery. Unions and business must work with Government to develop a strategy to address the root causes of the inequalities that are hitting us now as a key part of shaping the UK’s future of work.
Finally, health and well-being should be elevated to be the primary goal for the economy. COVID-19 has brought home the truth that measurements of health and wellbeing, not GPD, are the gauges that determine our success.
As we manage and overcome Covid-19, mapping the geography of good work and health together are the best way to identify priorities and focus new resources that will create a country better prepared and more resilient in the face of the upheavals ahead.
A version of this blog was first published in the Independent on 18 March 2020. Written by Anna Thomas and Sir Chris Pissarides.