A think tank has called for a renewed ‘good work’ agenda to improve minimum standards for workers, beyond increasing the national minimum wage.
According to the Resolution Foundation’s Low Pay Britain 2023 report, which was funded by the Nuffield Foundation, the UK’s minimum wage is now among the highest in the world, but job quality is lower than its international counterparts.
The report defines “good quality” work as that which provides security, autonomy, a voice in the workplace and opportunities for progression, but many people on lower incomes say their work lacks these qualities.
Workers in the lower pay quintile are almost twice as likely as those in the highest paid quintile to say they have little or no autonomy at work (38% compared to 15%) and are four times more likely to experience volatility in their hours and pay (22% versus 6%).
Low pay
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Seventeen per cent of lower-paid workers are working fewer hours than they would like, compared with 4% of higher earners.
Its survey of 2,000 private-sector employees also found that more than half of people earning less than £20,000 per year would lose pay if they had to miss work for a family emergency, five times the rate among workers earning above £60,000 (12%). Lower earners are also more likely to receive only statutory sick pay (56%) or nothing at all if they have to take a week off because of illness, compared to one in 10 earning above £50,000.
Despite increases in the national minimum wage, job satisfaction among the lowest-paid has fallen in the past three decades, while it has been stable for the highest earners.
The report proposed that a renewed good work agenda sound focus on three areas:
- continuing the current pace of national living wage rises in the next Parliament, which would see it reach 73% of typical earnings, or £13.12 on current forecasts, by the end of this decade
- adopt an earnings replacement approach to sick pay, where SSP is paid at 65% of a worker’s usual earnings, matching typical OECD rates
- giving workers a new right to a contract reflecting the hours they usually work, at least two weeks’ advance notice of shifts, and compensation for late changes.
It added that the remit of the Low Pay Commission should be widened to ensure that minimum wage rises do not make it more expensive for firms to use low-paid labour.
Nye Cominetti, senior economist at the Resolution Foundation, said: “We should celebrate the progress that Britain has made on tackling low pay thanks to the national living wage, while recognising that we have a long way to go on job quality. Too many low earners suffer from poor quality work, be it from inadequate sick pay or unacceptable uncertainty about when they will be expected to work.
“Too often work means very different things to lower and higher earners. Not enough of the former enjoy the basics of dignity, respect and security that the latter take for granted.
“That’s why we need a new ‘good work agenda’ that goes beyond a higher minimum wage so that workers see improvements to the quality of their jobs as well as the size of their pay packets.”
Commenting on the findings, Recruitment and Employment Confederation chief executive Neil Carberry said: “The success of the minimum wage has always been in trying to find a level which raises pay without major loss of employment. It is right to continue in this vein, especially in light of rising inflation.
“But a wage can never be just an income standard, it must address affordability for firms in different sectors and areas, that is why the role of the Low Pay Commission matters. The LPC can both ensure our experimentation is successful and build business and worker support for the standard and compliance with it.
“A particular challenge for all employers, especially government, is making sure that other policies adapt to higher wage rates, including things such as NHS agency worker rates, social care funding and the measurement of hours for salaried staff who are now increasingly caught by the NLW, which works on an hourly-paid basis.”
Carberry said the government should consider reforming SSP and reintroduce the support the government introduced during the pandemic, which saw it cover SSP costs for employers.
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“This will help to ensure workers get the support they need when sick, without putting the business in jeopardy because it can’t afford the liability around SSP expenses,” he said.
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