Report Highlights Most Care Workers Need £2 An Hour Pay Rise

27th January 2023

Social care workers were unequivocal about why the sector is so short-staffed despite the many positives of the job: low pay relative to the skills required. And the figures bear this out. Median hourly pay among frontline care workers stood at £10.90 in April 2022, well below the economy-wide average of £14.47 and less than rates offered in low-paid jobs in offices, call centres, transport, and nursing assistants in the public sector.

Moreover, the pay ‘premium' that social care workers have historically commanded relative to other low-paid jobs has almost vanished. The Migration Advisory Committee calculated that in 2011 the average care worker's hourly pay was 5 per cent higher than
other low-paid jobs; by 2021, that differential had fallen to just 1 per cent. Cuts to funding after 2010 (which have since been reversed, albeit not on a per-head of elderly population basis) and a rising wage floor have left the sector in a vicious circle: inadequate pay
(relative to other jobs) leads to recruitment and retention issues, putting more pressure on the remaining workers, who then feel their pay does not reflect the demands of the job more acutely than ever.
In practice, a large part of the social care workforce - domiciliary care workers - is likely have lower rates of pay than the figures above suggest. Our focus groups made clear that it is rare for domiciliary care workers to be paid for their travel time. Instead, on average they receive a higher hourly rate than residential care workers (median hourly pay of £11.07 compared to £10.50 in April 2022) and in many instances a mileage allowance. But
the latter should not be counted as pay (it is provided to cover fuel, depreciation and the like) and the former is likely insufficient in many cases to ensure that when travel time is taken into account, the actual hourly wage is above the legal wage floor. A typical
domiciliary care worker earning £11.07 per hour and spending the average amount of time travelling between clients (20 per cent of their ‘contact time' - equivalent to 12 minutes for each contact hour) would have an effective hourly rate of £9.20, 30p an hour below
the adult minimum wage.

Another specific group of care workers who potentially face employment standards problems are personal assistants (PAs) directly employed by the people they provide care for. Estimates indicate there were around 100,000 personal assistants in England in 2021-22 who were funded by direct payments, and an unspecified number working in a purely private fashion. Our focus groups showed these workers operate in a largely informal and
unregulated space and, although this suits some, it leaves others highly exposed to poor and potentially unlawful treatment. Critically, at least one-in-ten PAs are classed as self-employed, and therefore have no protection when it comes to minimum wage, holiday pay or notice periods. But this classification is questionable: PAs do have a large degree of control over how they do their job, but they cannot substitute themselves with another - a key test of self-employment status.

So why do social care workers put up with often poor, and in some cases unlawful, conditions at work, especially when they are in such high demand? We suggest their power in the labour market is weak for three key reasons. First, the workers in our focus groups were strongly attached to their jobs and often viewed their work as a vocation.

The data bears this out: although there is significant staff turnover, social care workers are less likely than many other low-paid workers to leave their sector altogether. Between 2011 and 2020, 1.5 per cent of frontline care workers made a job move outside of frontline
care per quarter, lower than the rate of sector-changing job moves among low-paid workers in hospitality (3.8 per cent), call centres (3.3 per cent), retail (2.4 per cent), leisure (3.4 per cent), and storage (2.1 per cent). Second, and less positively, the feminised nature of the workforce means that for many, outside options are limited. Close to one-in-five (19 per cent) of frontline care workers are women with dependent children, and one-third (33 per cent) of residential care workers live within 2 kilometres of their work, with both figures considerably higher than the economy-wide average. Third, at 20 per cent, rates of union membership are relatively low among frontline care workers (this falls to 15 per cent for social care workers in the private sector).

Overall, then, it is clear that social care workers lack structural power in the workplace and for many, the only way they can assert themselves is by exiting the profession. This outcome is clearly a bad one from both the worker's (many love their jobs) and society's
(there is an acute and enduring need for social care workers) point of view. So how should policy respond? Some local authorities are signing up to voluntary codes to improve pay and standards for care workers. These are laudable, and will have made a difference to the workers in those areas, but their aggregate effect has been limited to date. We conclude that a sector-wide minimum wage which is £2 higher per hour than the national minimum is required.

First of all, this would drastically reduce the risk of unlawful minimum wage underpayment among domiciliary care workers. A domiciliary worker paid at £11.50 an hour (the current National Minimum Wage plus £2) and travelling around 20 per cent of
their day would effectively be paid the minimum wage. Second, a sector wage floor at this level would put clear water between social care and other low-paid jobs, and therefore make a material difference to the sector’s recruitment and retention problem. Of course, a higher wage floor would come with the trade-off of a higher funding requirement. Based on previous calculations, raising pay to this level would likely require state spending on social care to increase by 8 per cent (with part of this increase returning to the
government via higher tax receipts and lower benefit spending).

In addition to a higher wage floor, to ensure minimum wage underpayment is properly identified and sanctioned, employers must be required to keep records of travel time and furnish these to workers as standard so they can flag issues, and to enforcement
agencies on request. HMRC already undertakes significant enforcement action in the sector, but not enough to eradicate minimum wage underpayment given the entrenched combination of low pay and unpaid travel time.

Finally, in cases where PAs are fully or part-funded by the state through direct payments, the state’s support with care costs should come with the quid pro quo that such workers are offered a contract and a minimum set of employment standards.

There is an urgent need for more social care workers in the UK today, and demand will only increase over time. Tackling recruitment and retention in the sector requires a fundamental rethink about its funding, and a sector-specific approach to enforcing workers’ rights. But in the longer term, an economic strategy that not only raises living standards across the board but reduces inequalities in the UK can only succeed if jobs like social care are good jobs: properly remunerated, with air terms and conditions and where rights are a reality and not just rhetorical.

Note
This is an extract from the Who Cares Report
Read the full report HERE
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