Has work changed forever: low paid workers

The early months of the UK lockdown saw a new recognition of the importance of many low-paid workers, and how central they were to keeping the country safe, fed and connected to the outside world through transport and deliveries. But even back then I, and many others, were concerned that this would be at best an improvement in public perception, with no concrete improvements to back it up. 

More than a year later, how has the pandemic affected those paid the least? Has any meaningful change happened to improve their pay or security? 

Can you afford to get ill?

Firstly, has the safety net for those who fall ill improved? UK Statutory sick pay (SSP) remains among the lowest in Europe, and many workers still do not qualify, through reasons of contract type or very low pay. Late last year figures suggested that the one-off £500 self-isolation payment for those on low incomes was not being paid to the majority of people who applied for it.

For those in low paid work who were ill with Covid, or suspected they were, the prospect of having to survive on SSP or try to claim the self-isolation payment meant they either chose not to be tested, or could not afford to take time off work, endangering themselves and others. As there appears to have been an increase in insecure work through the pandemic, there may now be even more people who aren’t eligible for SSP, and are therefore facing the terrible dilemma of whether or not to get tested.  

Just this week evidence has come to light that ministers discouraged the promotion of furlough for self-isolating workers rather than statutory sick pay, as the costs to the Treasury would be much higher. The impact of this, it is argued by many, will have been to force more low paid people to stay working to avoid financial hardship, increasing case numbers.

Those in lower paid roles have been found to be among those at highest risk of dying from Covid, for example those in face-to-face health and social care roles, and manual manufacturing jobs.  Although this is correlation rather than direct causality, when we look at other factors, we see that for some low paid workers such as those from BAME communities, their risk of serious illness and death is significantly increased.

Pay dropped, costs rose

Two-thirds of full-time workers receiving less than the Living Wage say their pay decreased due to reasons linked to the pandemic, with drops in income more prevalent among parents, younger workers and BAME workers. Many low income households also had increased costs, for example due to schools being closed and the whole family spending more time at home. Coping with this alongside the loss of income many experienced has been a major challenge. The expansion of insecure work over the last 18 months is visible in the growth of platform work, where recent evidence suggests that the majority of the big platforms do not pay the living wage.

Some sectors are bouncing back, but have the jobs improved?

There is some anecdotal evidence from the UK and US that labour shortages are pushing up wages in hospitality. Where people have a choice, it seems they are not rushing to apply for jobs with low pay and antisocial hours, so employers are having to improve what they offer to get new staff. Whether this effect will last is unclear. When furlough ends, unemployment may surge and more candidates might enter the market, which could enable employers to push wages back down again. It’s not necessarily a directly linear relationship though, and there is likely to be some geographic variation as well. Places where low paid jobs are concentrated such as coastal towns might have less in the way of labour shortages compared to those with a more diversified labour market, so may not even enjoy a brief uptick in wages or conditions.

Will the same, low paid jobs come back?

Not every job that was furloughed or sector that is bouncing back will provide the same opportunities as pre-pandemic, so can we look forward to a reduction in low paid jobs, and creation of better quality ones? Some of the low paid jobs in heavily impacted sectors, such as customer-facing retail or services, have been affected by the speeding up of shifts to digital and automation. Some are disappearing, seemingly for good, while others are growing, but many of those growing are also low paid, like online retail warehousing or delivery drivers.

McKinsey forecasts most job growth in the US will be in higher waged roles, which at first glance seems positive. However it places pressure on the low waged to retrain and upskill at a time when they may be more likely to be out of work. As I’ll explore in the fourth piece in this series, this is not always an easy combination to manage.

Part-time workers, more likely to be low paid than full-time, and more likely to be women, have been furloughed at a higher rate than full-time. When furlough ends, there are suggestions that many of these part-time jobs may be gone forever, not to be replaced by higher paid ones but just a straightforward loss to those who need flexible working patterns and have other commitments.

So we can see that the potential for improvements in the quality of work hinted at last Spring haven’t amounted to much. Income protection for those who can’t work due to illness really hasn’t improved, and many low paid workers have seen their income collapse. The pandemic might have hastened the demise of some low paid jobs, but many who lose their jobs won’t be able to walk straight into something better paid. There’s still a long way to go to improve the quality of work for those whom we claim to value more than ever.

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(c) Anna Dent 2021. I provide research, writing, expert opinion and project development in Good Work and the Future of Work / In-Work Poverty and Progression / Welfare benefits / Ethical technology / Skills / Inclusive growth