by Calum Carson
High levels of low pay and in-work poverty have long been a feature of the British economy, despite a high-profile campaign and the individual efforts of some ethically-minded employers to introduce a Living Wage for all workers. However, can the new-found public appreciation for low-paid key workers since the emergence of COVID-19 successfully (and permanently) challenge the low-pay status quo, and translate this vocal support into helping more workers afford a decent standard of living?
In 2001, following a listening exercise with local residents, a small community organisation in the East End of London called Citizens UK launched the “London Living Wage campaign”. With low-paid workers (predominantly women, and predominantly women of colour) fed up with having to work two or more jobs and sacrificing time with their families all to barely keep up with the cost of living, the goal was to stage actions and demand that individual employers set wages at a higher level that better reflected what was needed to live in London at the time. The message was simple: that the gap between legal minimum wage rates and what people needed to get by was just too far apart, and that employers had a moral duty to ensure that their own workers were not suffering the effects of in-work poverty.
Today, almost twenty years later, the UK Living Wage movement continues to thrive, with over 6,000 individual employers now officially accredited with the campaign as “Living Wage Employers,” committed to voluntarily paying a higher rate of pay to their employees that better reflects the cost of living than national minimum wage scales suggest is needed. Depending on their location, organisations that sign up agree to ensure that workers (including subcontracted ones) are paid either the “UK Living Wage” rate (currently set at £9.30 an hour), or the “London Living Wage”, set at £10.75 per hour to take account of the higher cost of living in the capital. Both are calculated based on a core basket of goods and services, including everyday items such as food, clothing, and heating costs, to arrive at levels of pay which reflect what is needed on average to meet a decent standard of living in the UK today.
In-work poverty itself is defined most simply as when employment in a stable job does not afford an individual and their household a viable route out of (and protection from) material poverty, characterised by problems (among others) around health, housing, crime, and homelessness, alongside more deep-seated impacts (poverty early in a child’s life can have a harmful effect on brain development, for example). Over the past twenty-five years in-work poverty levels in Britain have risen considerably, increasing from 37% of households in 1994 to an 58% in 2018, and while the UK has seen record employment rates in recent years, this is not matched by subsequent rises in lifting people out of poverty. While the primary cause for this state of affairs is that national minimum wage rates are repeatedly set too low, changes to the tax and social security system and over a decade of austerity measures have also played their part, with reductions in benefit levels leaving families with little protection to cope with low earnings (alongside rising housing costs taken a greater share of income). Given this state of affairs, responsibility for ensuring that workers are not in poverty has increasingly been shifted towards employers, with the UK Living Wage campaign appealing to organisations to recognise the moral obligations that they have towards protecting their employees from the effects of in-work poverty.
And to their credit, many employers within Britain have accepted the rationale of these arguments, and voluntarily agreed to pay the Living Wage to their workers (and to be publicly held accountable by the campaign if they renege on this commitment). The number of organisations coming on board have also been boosted in recent years by the increasing wealth of evidence that paying the Living Wage also has clear strategic benefits for employers itself, in areas from an enhanced public reputation, lower sickness and absence rates, to attracting a higher quality of candidate at the interview stage by individuals motivated by an employer’s high ethical standards. At the time of writing there are 6,486 accredited Living Wage Employers operating within the UK, in industries as diverse as construction and engineering to higher education and trade unions, with further accreditations having continued even through the past few months of upheaval caused by the emergence of COVID-19.
Nevertheless, it’s continued existence almost twenty years after its establishment is evidence that the structural weaknesses of the British economy and the failures of public policy that have resulted in the continued growth of in-work poverty continue to exist. While the UK Living Wage movement has achieved a tremendous amount of success since its creation (including last year passing the milestone of winning over £1 billion in extra wages to workers since the campaign began), it cannot hope to eliminate in-work poverty across Britain in its entirety on its own, nor hope to convince every single employer to begin paying the Living Wage: for such widescale change to occur, the state itself needs to be persuaded to step back into the low pay arena in clear and credible ways. And it just may be the case that right now, in a post-pandemic world in which the status quo of so many aspects of the labour market are changing and rapidly evolving, positive and permanent transformations in tackling in-work poverty within Britain have the best chance of succeeding in some time.
Since the enormous changes to all of our lives brought about by the emergence of COVID-19, one notable change has been the outpouring of public support for “key workers”. This includes supermarket workers, putting themselves at risk of infection on a daily basis as they ensure that food supplies remain available and consistent; delivery drivers, ensuring that those in self-isolation can acquire the necessary resources while in quarantine; cleaners, whose jobs have almost overnight taken on an significant increase of indispensability; and (perhaps most notably) care home workers, many of whom have sacrificed seeing their loved ones for weeks and even months to protect the vulnerable and at-risk individuals during this pandemic.
This civic increase in recognition of the vital role that such key workers play is exemplified most strikingly by the “Clap for Carers” movement, in which the British public were encouraged to clap in appreciation at 8pm each Thursday evening for (among others) “healthcare workers, delivery drivers, porters, cleaners, and all those who are out there making an unbelievable difference to our lives in these challenging times.” And for the July issue of Vogue, it was not supermodels or celebrities which graced the cover, but an NHS midwife, a supermarket worker, and a train driver, chosen for (in the editor’s own words) the fact that they and millions of other key workers “at the height of the pandemic, in the face of dangers large and small, put on their uniforms and work clothes and went to help people.”
This public support has also been accompanied by a growing awareness that many of these key workers are also typically paid below Living Wage rates of pay, and that they have long been inadequately rewarded in both public recognition and their salaries for the essential jobs that they do. It is particularly striking that so many of the industries that have been the most important in keeping things going in the past few months are the very same ones with high proportions of low-paid workers employed on insecure and precarious contracts, including retail, hospitality, cleaning, construction, and care work. This has led to a wide-ranging debate about what constitutes a proper financial reward for key workers, and how existing norms across the UK labour market may be transformed to reflect this shift in public attitudes.
Any wider response from the government to this new climate of recognition and appreciation has thus far remained invisible, beyond paying lip service to the vital role that key workers are playing. On an individual employer level, however, a variety of responses have been seen. Some employers have responded by introducing special pay rewards for front-line staff involved in combating and/or working through a global pandemic, although as the initial period of lockdown gradually winds down many organisations are now winding such schemes down again. Other organisations have become Living Wage Employers as a direct response to the current crisis, while some have claimed the uncertainty of current economic conditions as their reasoning to renege on previous commitments to accredit with the Living Wage Foundation. The Living Wage movement themselves have also entered the debate about the future of low pay in Britain, launching a comprehensive campaign around securing higher salaries for key workers and arguing that “they are the foundations of our economy and society – and should be paid a real Living Wage.” Additional efforts by already-accredited employers to reward their workers are also being highlighted, helping to demonstrate to other organisations that there is more they can do for their workers beyond simply paying the Living Wage itself.
Of course, any optimism that a post-coronavirus Britain will be transformed into one in which low pay and in-work poverty are a thing of the past must also be tempered by the almost unprecedented economic conditions the UK and the rest of the world are now facing. And while it may be that the current public demand for greater financial reward for key workers represents the best chance in some time to tackle these issues, there is an equally high likelihood that substantial change at a structural level simply cannot be achieved when both the short and long-term challenges faced by the country and individual employers is so uncertain. It is notable that the actor with the most power to fundamentally alter the low pay landscape, the British government, have been silent on promising any rises in national minimum wage rates closer to or even equal with the Living Wage rates campaigned for in in the UK for the past two decades: whether this will change in time remains to be seen.
Much will rely on the Living Wage campaign ensuring that the new-found recognition and support for low-paid workers remains at the forefront of public debate, and that both the moral obligations and business benefits of becoming a Living Wage Employer are communicated to other organisations effectively. They already have one ally in translating these good intentions into solid change, however: the founder of the “Clap for Carers” movement herself, Annemarie Plas, who has argued that it is time for the clapping to end and more “substantive measures” to be introduced to ensure that more workers across Britain are able to better afford a decent standard of living in a post-pandemic world.
About the Author
Calum Carson is a doctoral researcher at the Centre for Employment Relations, Innovation and Change, Leeds University Business School.