• CPP analysis of ONS data shows that average death rates from coronavirus among key workers was 40% higher than the average working person between March and December last year.
  

• Ahead of the March Budget, CPP calls for central government to fund compensation payments of up to £1,200 per key worker.
• CPP calls for DHSC to provide local government with funding to pay all publicly commissioned care workers a real living wage.

The Centre for Progressive Policy (CPP) warns that there is a gap between the ‘market’ and social value of keyworker roles, particularly within the adult social care sector. In the report, ‘Pay, productivity and social value: why key workers deserve a better deal’, CPP highlights that while some key workers are well paid or well represented by trade unions, others are suffering under insecure job contracts and poor enforcement of minimum wage standards. CPP calls on the government to intervene by compensating all key workers for their contribution during this time of crisis and consulting on fairer minimum standards in key sectors beyond the pandemic.

The paper reveals that the key workers at highest risk are among the lowest paid. Care workers’ hourly earnings are nearly 30% below the median, and a third are employed on zero hours contracts. Meanwhile, the death rate of home care and care workers has been over three times higher than the average working person during the pandemic. CPP argues that society should acknowledge the vital work done by these people in offering a one-off compensation payment in recognition of the personal risks they have taken.

Respecting and properly remunerating key workers remains essential beyond the pandemic. The demand for social care in particular is already high and is increasing in deprived areas in the UK; paying care workers a fair wage would both improve care outcomes and contribute to the levelling up agenda.

CPP is calling on the government to remunerate key workers for risks taken throughout the pandemic, and to ensure all key workers receive a fair wage relative to their social value by:

• Making all key workers eligible to apply to HMRC for a tax-free coronavirus compensation payment of between £200 and £1,200 at the March Budget at an estimated cost of £1.5bn - £4bn.
• Consulting on developing sector specific, minimum pay and employment conditions that better reflect the social value and risk associated with key worker roles.
• Funding local councils to pay all publicly funded care workers the real living wage as a minimum.
• Building social care up as a profession by developing nationally agreed skills and competencies frameworks and providing progression pathways.

Rosie Stock Jones, Senior Research Analyst, Centre for Progressive Policy, said:

“Key workers have been invaluable to society over the past year, with many taking huge personal risk whilst the rest of us stay home - yet these workers are often low paid, with many on insecure contracts.

“This discrepancy between social and ‘market’ value must be rectified, and there is widespread public support for this. CPP calls on government bodies to work together to ensure that the pay and working conditions reflect the contribution key workers make to society, starting with compensation for the risks taken during the pandemic.”

Laura Gardiner, Director, Living Wage Foundation, said:

“In these difficult times, it is more important than ever that those who are continuing to risk their health and wellbeing to keep our economy going are paid what they need to live. Key workers are providing a crucial service in supporting and caring for the vulnerable and their families. As a society, we have a responsibility to go beyond the clapping, and to compensate these key workers fairly for their contribution.

Paying the real Living Wage is not only the right thing to do, but is also beneficial financially for firms – a fair wage increases motivation and productivity. And in sectors like social care where wages are driven by public spending, we need to move beyond words of appreciation – policy makers should commit to a Living Wage for care workers and increase funding for the sector accordingly.”

Sarah Davidson, CEO, Carnegie UK Trust, said:

“Even before the pandemic, there were deep inequalities in the quality of work people have access to, and endemic challenges in social care which compromise the wellbeing of the staff employed in the sector as well as those in their care.

The recommendations in this thoughtful and pragmatic report set out the levers government has at its disposal to improve the situation of key workers, and how we must go further than clapping for carers by taking concrete steps to improve their job quality.” 

Figure 1. Death rate involving Covid-19 by keyworker occupation (rate)

Figure 2: Suggested social compensation for keyworker occupations based on a VPF of £2.1m

Notes to the editor

1. The report can be found here. For enquiries, please contact Thomas Hauschildt, THauschildt@progressive-policy.net
2. Earnings data is from the 2020 Annual Survey of Hours and Earnings (ASHE) and data on zero hours contracts are Skills for Care estimates is drawn from the Adult Social Care Workforce Database 2019-2020.
3. Identifying key workers: Death rates for key workers are identified by individual occupation using the ONS keyworker reference tables, published in May 2020. As death rates are not also available by sector, CPP cannot guarantee that everyone within every occupation is a key worker.
4. Key worker deaths involving Covid-19: CPP analysis is based on ONS data on Coronavirus (COVID-19) deaths by occupation for England and Wales for March to December 2020. CPP has estimated the mortality rates across key worker occupation groups by aggregating data individual occupation data. Death rates are for those aged 20-64 and have been age and gender standardised. Where data for individual occupations are missing or based on a small sample, they have been replaced with data for minor, sub major or major occupations.
5. Social compensation for key workers: Suggested payments are based on the social value of the increased fatality risk that keyworkers have been exposed to compared to the wider working age population using the Value of a Prevented Fatality (VPF), which is set by HM Treasury guidance at £2.1m. The minimum amount of £200 is based on the average additional risk experienced by those in keyworker occupations. The maximum is based on the highest death rate for an individual occupation. Total cost estimates assume take up rates to be the same as the SEISS (67%) and do not include the costs of administering the scheme.
6. Living wage and living hours for adult social care workers: This would mean paying all adult social care workers 9.50 an hour or £10.85 in London and giving them the right to four weeks’ notice for shifts, a contract that reflects the hours they work and to a minimum number of hours. For more information see the Living Wage Foundation website: https://www.livingwage.org.uk/living-hours
7. About CPP: The Centre for Progressive Policy is a think tank committed to making inclusive economic growth a reality. By working with national and local partners, our aim is to devise effective, pragmatic policy solutions to drive productivity and shared prosperity in the UK. Inclusive growth is one of the most urgent questions facing advanced economies where stagnant real wages are squeezing living standards and wealth is increasingly concentrated. CPP believes that a new approach to growth is needed, harnessing the best of central and local government to shape the national economic environment and build on the assets and opportunities of place. The Centre for Progressive Policy is funded by Lord Sainsbury and hosts the Inclusive Growth Network.
8. For more information on the Centre for Progressive Policy, please see http://www.progressive-policy.net/or follow @CentreProPolicy