Key Workers in the Pandemic: Security traps among Britain’s essential workers

What you need to know:

  • Report warns Universal Credit and planned National Insurance rise are putting pressure on low-paid workers.
  • 45% of supermarket workers and 31% of care workers are paid less than the benchmark for decent living standards.
  • Largest study of key workers during the pandemic calls for reforms to sick pay, better childcare and decent mental health support.

Key workers in the pandemic is an 18-month study carried out by the RSA supported by Trust for London and the Standard Life Foundation which tracked key workers’ physical, mental and financial wellbeing during the pandemic via focus groups, interviews and a regular YouGov survey.

It finds that the UK’s 10.5 million key workers — a third of the UK workforce — face a “security trap”: a trade-off between their health and their financial well-being.

The report calls for a new deal for key workers, including paying all essential workers the Real Living Wage (£9.50 per hour, or £10.85 in London), more childcare and better mental health support.

Key findings

  • At the height of the pandemic, 65% of key workers were struggling with their mental health, rising to 73% of NHS workers.
  • In the health and care sectors, stress and workloads were the top causes for concern, while for school, nursery, and supermarket, it was a fear of catching the virus.
  • One-in-five key workers found it difficult to take time off if unwell, rising to one-in-four care workers and nearly 40% of NHS staff.
  • Around 410,000 supermarket workers (45% of the total) and 393,000 care workers (31% of the total) are paid less than the Real Living Wage.
  • Women, ethnic minorities, single earner households, Londoners, and renters were disproportionately less likely to be able to afford an unexpected bill of £100.
  • Insecure work pushed many to work when unwell. More than one-fifth of those who said they would struggle to pay an unexpected £100 bill also said they failed to isolate when they should have, compared to just one-tenth of the whole sample. Of ethnic minority key workers, 18 percent were unable to isolate when they should have, higher than the national average.
  • For some, Universal Credit failed to help them into work, especially women with childcare. One interviewee, a healthcare worker on a low-income, told researchers that “if I work more and earn £1,300 a month, I get about £300 in Universal Credit. If I work less and earn £600, then I get £700/£800 and I do not pay as much for childcare”.
  • 660,000 key workers are set to lose their £20 per week Universal Credit lifeline later this month, when the planned uplift ends, according to RSA calculations.
  • The recently announced 1.25 percentage point increase in National Insurance rise will cost the average full-time care worker an extra £141 per year, a supermarket worker £148 per year, a van driver £164 per year, and for a nurse will be an extra £304 per year. There is, at present, no guarantee that the money raised will be spent on higher wages.

Key recommendations

For government:

  1. Enhance Statutory Sick Pay: The government should look to bring SSP in-line with the OECD average for Western Europe. For instance, it could set SSP at 60 percent of normal wages (OECD average) in the first six weeks, which would be paid by employers as with the current model. This would mean a worker on the full- time median annual pay of £31,461 (£2,620 per month pre-tax) would earn £1,573 per month from SSP instead of the approximate £415 on the current SSP model. For serious infectious diseases (such as COVID-19) the rate should be 80 percent - in line with what has been the replacement rate of the government’s job retention furlough scheme for most of the pandemic. SSP should also last 52 weeks instead of the current 28, again bringing our regime into line with Western European averages.
  2. A Good Care Work strategy for the care sector: The government should work with cross-sector partners to develop a detailed Good Care Work strategy alongside a wider funding settlement. This could provide a blueprint for other key worker and non-key worker industries. Improving conditions within social care is good for workers, but also good for productivity, staffing retention and recruitment. The Good Care Work strategy should have provisions to: end unfair one- sided flexibility; review pay, wellbeing, professional development and staff retention as part of the critical criteria within Care Quality Commission inspections; and professionalise the sector. To support good work within social care, other innovations in policy could be supportive:
    Trial Personal Learning Accounts within the care sector to aid and quicken the professionalisation of the sector.
    Trial Universal Basic Income in locations with high proportion of key workers, particularly care workers.
  3. Create a target to ensure that all key workers are paid the Real Living Wage by the 2024 election. This can be done via a procurement commitment for those paid by the public purse, including care workers, as well as incentivising and encouraging private sector businesses to commit too. In the relevant retail sector, this could be measured through enforced transparency on pay by every essential retailer of more than 100 staff and workers. Improving pay is a central pillar of Biden’s $400bn package for home and community-based care, which would not only improve outcomes for workers, but for care recipients, local economies, and care providers through increased productivity, staff retention and recruitment. This would cost an estimated £455m per year for the care sector in the UK. A care worker earning below the Real Living Wage would gain on average an estimated £2,200 per year in pre- tax income in London and £990 per year in the UK overall. This must be met with improved central funding. For the entire supermarket sector, it would cost an estimated £262m extra per year in total, with each worker currently below the Real Living Wage earning an average £410 extra in pre- tax annual income.
  4. To support mental health in the NHS, and relieve pressure on the health system, the government should work to increase staffing numbers, meeting the 108,000 FTE nurse shortfall expected by 2028/29. It is estimated this would cost an additional £900m to the annual budget of Health Education England by 2023/24 to fill these gaps, excluding staffing costs.89 To enhance retention of non-medical staff, a pay rise of 12.5 percent over three to four years should be introduced; this would have a net cost of an estimated £820m.90 This could be paid for by bringing capital gains tax rates in line with income tax.
  5. To support supermarket staff, the government should legislate to make the abuse of retail staff a specific offence. This would give supermarket staff the same protection as afforded to other key workers by the Assaults on Emergency Workers (Offences) Act 2018.
  6. To support working parents and reduce gender inequality in the workplace by treating childcare as infrastructure, making childcare affordable and flexible for all. Similar proposals are again being touted as a means to boost the US economy within Biden’s administration. Steps include to:
    Fully fund reasonable childcare costs for those working while on Universal Credit.
    Enhance the flexibility of childcare for the benefit of key workers and other shift workers.
    Fully fund reasonable costs for childcare providers. In return, require providers to sign up to a ‘good childcare work’ compact.
    Set a maximum childcare outlay per household of no more than 10 percent of household income.
    Abolish separate financial and provision support for nought to two-year-olds and three to four-year-olds to end market distortions.