Government should prioritise decent jobs that are stable, flexible and pay at least the real Living Wage

@LivingWageUK reports that more than 3.5 MILLION PEOPLE are in low paid, insecure work 

Living Wage Foundation today (29 Jul) releases new report “THE INSECURITY COMPLEX: LOW PAID WORKERS AND THE GROWTH OF INSECURE WORK”on unstable and volatile working in labour market.

There are 3.7 million people (12%) in the UK in low paid and insecure work, and these insecure workers are more likely to have lost work during the pandemic, according to new research conducted by the Living Wage Foundation (LWF). 

LWF analysis of the Labour Force Survey (LFS) and Family Resource Survey (FRS) found: 

• Around 3.7m people are in insecure forms of work and earn less than the real Living Wage of £10.85 per hour in London, and £9.50 outside of London.
• Low-paid insecure workers are at a greater risk of losing work due to Covid-19. 46% of insecure, low-paid workers were away from work (mainly due to being furloughed) during the height of the pandemic, compared to 17% of non-insecure workers earning above the Living Wage.  

The research found that around 3.7 million workers are in low-paid work and experience some form of work insecurity, defined as those who are underemployed, report volatile pay or hours, are in non-permanent work (where this isn’t their choice), or are in low-paid self-employment (those who met more than one of these measures were not double counted).  

While the LFS and FRS collect data on the broad presence of insecure work, neither collect specific, detailed data on important measures of work insecurity, such as short shift notice periods and last-minute cancellations of shifts.

To fill this gap the LWF commissioned Survation to run a Separate poll of 2,021 employees. The polling further highlights how unpredictable working hours are for many, and the significant impact of insecure work on family life, health and the ability of workers to plan their lives. 

Polling found that of those paid below the real Living Wage: 

• 12% receive less than 24 hours’ notice for their working hours, shifts or work schedules. 
• 49% receive less than a weeks’ notice of their working hours, shifts or work schedules. 
• 68% receive less than four weeks’ notice for working hours, shifts or work schedules 
• Almost half (42%) have experienced unexpected cancellations of shifts, and of those, 28% receive no payment and 90% get shifts cancelled without full pay 
• 40% said short notice periods had negatively impacted their ability to plan their work and personal lives 
• Over a third (35%) said that short notice periods for shifts had a negative impact on their household finances 
• A quarter (25%) said they had to pay higher travel costs due to short notice for working hours, shifts or work schedules, and 23% had done the same with childcare costs 

Sector Reaction 

Responding to a new report from the Living Wage Foundation on unstable and volatile working in labour market, Katie Schmuecker, Deputy Director of Policy and Partnerships for the Joseph Rowntree Foundation said:

“Good jobs should provide a reliable foundation to enable people to build a better life for themselves and their families. Too often, the jobs that are available don’t offer the stability or security workers and their families need to plan their lives and avoid being pushed into poverty. More than a third of people paid below the real living wage saying that short notice periods for shifts had a negative impact on their household finances.

“Worryingly, those who were lowest paid before the pandemic have been hardest hit by the uncertainty that has followed it, when those whose finances have the smallest margins rely the most on forward planning and being able to budget. Some employers already do the right thing by guaranteeing secure hours for their employees but alongside this it is vital that the Government brings forward its promised Employment Bill in this parliamentary session. Action on secure work will address the injustices faced by many working families and prioritise good jobs as the economy recovers”.

Living Hours Graham Griffiths, Director of the Living Wage Foundation, said:

“Insecure work has been a consistent feature of the labour market over the past twenty years. The result is millions of people unable to get the hours and the pay they need to meet their everyday needs, with many families throughout the UK struggling to keep their heads above water.  Over the past year this problem has been exacerbated, with many low paid workers in insecure jobs also more likely to lose work. There is a real danger that as we look to recover from the huge damage of the pandemic, we fail to recognise the vital need for an economy built on jobs with decent pay and secure hours. This is what we need for a modern, dynamic economy that delivers stability to workers, families and businesses.” 

John Stewart, HR Director, SSE plc, said: 

“This research shows just how many lives across the UK are impacted by insecure hours and working conditions. Earning below the Living Wage is hugely challenging for many people, but when this is combined with not getting enough hours or not receiving proper notice for shifts, it’s even harder to weather the storm, particularly during such challenging times. Providing workers with stable, guaranteed hours alongside decent pay is essential not only for workers and families, but it makes sense for businesses too. It encourages longer-term thinking and careful planning, and it ensures a healthy and motivated workforce. That’s why SSE is proud to be a Living Hours employer: it’s the right thing to do for our workers and our business, and we hope our commitment will help show others the way”. 

Danny Harmer, Chief People Officer, Aviva, said:

“Businesses need to provide jobs that treat and pay people fairly. We should not underestimate the impact unstable and unpredictable hours have on the individual, and on their families too. Signing up to Living Hours stands for providing financial clarity and certainty.  That means happier and healthier colleagues which is good for customers, business and society.”

Meredith Adams, Sustainability Manager – Social Impact, abrdn, said: 

“Living Hours is effective and practical. It is an independent standard with a robust methodology which gives our organisation certainty that we are providing our people with well paid, secure employment. It creates a common understanding of these terms and practices and this shared definition is vital to improving the standard of employment across the UK. We also support Living Hours as an investor, as this plays a role in creating stronger and more resilient economies.”. 

Despite the overall scale of insecure, low-paid work, significant differences were also found based on ethnicity, age and the sector people work within 

A quarter (25%) of Bangladeshi workers experience low-paid, insecure work, the same as for Pakistani workers. Meanwhile, 13% of Black workers face low-paid insecure work, and the same is true of 10% of white workers and Indian workers respectively. The level of work insecurity amongst ethnic groups is effectively an inversion of median pay rates, with Chinese and Indian workers having the highest median pay and the lowest levels of work insecurity, while Pakistani and Bangladeshi workers have the lowest median pay with the highest levels of insecurity. 

Those aged 70 or above are the most likely to be in low-paid insecure work (35%), with young people (16–19-year-olds) the second most likely (27%). This u-shaped incidence of insecurity across age groups can be partly explained by those younger workers leaving school with fewer qualifications having less bargaining power or employment alternatives. Older workers can find themselves in insecure work for similar reasons, though they are also more likely to choose more flexible working arrangements as they approach retirement. 

London has the most low-paid insecure workers in gross terms, but not in percentage terms – the number of low paid insecure workers is therefore down to the greater number of jobs in the capital, rather than a greater risk of insecure work. In contrast, both Wales and North East have the lowest number of insecure workers, but the joint-highest in percentage terms.  

Making jobs work: Improvements to job quality are key to our recovery 

20th Jul 2021: A good job provides a way out of poverty and a foundation for building a better life. It means work that provides security and stability, that works around caring responsibilities and health needs, and that treats people with dignity and respect. Improving job quality and security can, and should, play a role in building a more productive and more inclusive economy as we emerge from the pandemic. But for too many people, jobs are not working.

JRF has been working with people with experience of poor-quality jobs to better understand the issues that hold people back. Combining their experiences with wider research, we have collectively designed a set of solutions focused on the Government’s promised Employment Bill.

The Employment Bill is the perfect opportunity to improve the quality of jobs and make work the reliable route out of poverty that it should be.

For too many people, jobs are not working. JRF has been working with people with experience of poor-quality jobs to better understand the issues that hold people back.

Combining their experiences with wider research, we have collectively designed a set of solutions focused on the Government’s promised Employment Bill.

Recommendations

The Government must bring the Bill forward in this session of parliament and use it to:

Introduce new rights to more secure work so people can plan their family life and finances, including the right to:

1. A secure contract that reflects your working hours after 26 weeks, with a zero-hours or short-hours contract something a worker can choose to opt in to after this point if it suits them.
2. Four weeks’ notice of your working schedules.
3. Compensation for last-minute cancellation of shifts.

Make flexible working the default from day one of employment and reconsider the business exemptions for refusing a request, so jobs work around caring responsibilities and health needs.

Double the number of labour market enforcement inspectors to make sure the new single enforcement body (SEB) fulfils its potential to prevent bad employers getting an unjust advantage by undercutting good ones.

 Planned cuts to Universal Credit will hit incomes of millions of households unable to afford a minimum living standard 

14th Jul 2021: The planned £20-a-week cut to Universal Credit in October is           set to leave out-of-work families with children receiving barely half of the income the public believes is required to achieve an acceptable standard of living, while adults without children will receive around a third, according to a new report.

The annual Minimum Income Standard for the UK in 2021 (MIS) report, based on research carried out by the Centre for Research in Social Policy at Loughborough University for the Joseph Rowntree Foundation, acts as a benchmark of minimum living standards in the UK. It is based on detailed discussions with members of the public about what they think we all need to achieve an acceptable standard of living.

The looming cut to Universal Credit would reduce the value of out-of-work benefits to their lowest recorded levels relative to what the public thinks is an acceptable income. If implemented, it would reduce the value of this support to 55% of MIS for a couple with two children aged 3 and 7, and just 33% of MIS for a single working-age person without children. Working families on low incomes would also see this support fall sharply.

Some working parents have in recent years been able to get closer to MIS due to increases in the National Living Wage, the £20-a-week increase to Universal Credit and more support for childcare under Universal Credit compared to the previous system. The resulting improvement in incomes risks being reversed for most families who have benefited if Universal Credit is cut.

The report also paints a concerning picture of how low-paid work and inadequate social security combine to pose serious financial risks particularly for single parent families and single adults without children.

• Even with a full-time job on the National Living Wage, a single parent with two children aged 3 and 7 is £46-a-week short of MIS – increasing to £66 if Universal Credit is cut.
• A single person without children relying on out-of-work benefits receives less than half of what they need through Universal Credit even before the cut.
• A single person needs to earn £20,400 a year to reach MIS, but they would only earn £17,400 if working full-time on the National Living Wage.  

Iain Porter, Policy & Partnerships Manager at the Joseph Rowntree Foundation, said:

“It is deeply concerning that millions of households across our country are having to live on incomes that fall so far short of what the public thinks is needed for a minimum standard of living. Social security should be strong enough for all of us when we need a lifeline, but cuts and freezes in recent years have left it to wear thin and threadbare.  

“We urgently need to restore public confidence by investing in adequate social security support for families when they need it. It would be a terrible mistake for ministers to instead weaken Universal Credit further by going ahead with the planned £20-a-week cut this October, leaving millions of families unable to meet their needs.”

A couple with two children aged 3 and 7 can reach MIS if both parents work full-time on the National Living Wage and can get within 5% of this level if one works full-time and the other half-time. However, only just over one in four couples both work full-time, often because suitable jobs are not available or due to other issues such as the availability of childcare or health conditions within the family.

There are also signs that after a period of low inflation, the cost of living is increasing once again. A family with children saw their minimum cost of living rise by around 2.5%, excluding rent and childcare. While rent inflation was low, childcare costs rose by 3-4% for pre-school nursery places and council tax rose by an average of 4%.

Excluding the £20 increase to Universal Credit, this means that the cost of living is rising at a faster rate than social security support which was only uprated by 0.5% in April 2021 (in line with Consumer Price Inflation back in September 2020).

This year’s report sought to understand how the public’s attitudes towards what comprises an acceptable living standard may have changed due to the pandemic. While the pandemic has profoundly affected people’s lives, the public continues to underline the importance of a stable income that allows people to participate fully in society.

In some areas of life, such as shopping and technology, there may be significant changes affecting minimum budgets in the future, but it is too early to assess their long-term impact.

Abigail Davis, one of the report’s authors and Associate Director of Loughborough’s Centre for Research in Social Policy, said:

“What we’ve heard from the members of the public drawn from across our society is that what’s needed for a minimum socially acceptable standard doesn’t fundamentally change, even under circumstances as challenging and unprecedented as these. 

“But as COVID constraints lift for many, it’s worth bearing in mind that for a lot of households the restrictions of not being able to go out, take kids to after school activities or go on a family holiday remain because those are the things people go without when there isn’t enough to make ends meet. Taking money away from low-income households will make it even harder for them to meet this standard of living.”

JRF recommends:

• The Government must keep the £20-a-week increase to Universal Credit and extend this support to people claiming legacy benefits who have been excluded.
• As the UK rebuilds its economy in the wake of the pandemic, the Government should prioritise the creation of decent jobs, that provide stability, pay at least the real Living Wage, and give people options about working hours.

Cutting Universal Credit at a time when families will already be facing rising inflation and higher unemployment is bad economics, and bad politics 

7th Jul 2021: The Government has announced that they are going ahead with the £20 a week cut to Universal Credit from this October. 

Torsten Bell, Chief Executive of the Resolution Foundation, said:

“The decision to cut Universal Credit by £20 a week this October will cut the incomes of the poorest families by over five per cent overnight.

“Doing this when family finances will already face headwinds from rising inflation and the risk of higher unemployment is bad economics, as well as bad politics.

“This huge cut will fall not on the families that have amassed large savings during the crisis, but on poorer families who have been more likely to take on additional debt. There are difficult trade-offs with all major spending decisions, but taking a gamble with family finances and the strength of the recovery this Autumn is the wrong choice.”

Top Tories urge @RishiSunak to #KeepTheLifeline – £5 billion emergency Covid-fighting welfare boost 

5th Jul 2021: Six former Conservative Secretaries of State for Work and Pensions press Rishi Sunak to keep £20-a-week Universal Credit uplift.

The Chancellor has been urged by former welfare chiefs and two leading think-tanks to keep the £5 billion investment made during the pandemic that is keeping Britain’s welfare system afloat, amid a stark rise in benefits claimants following Covid-19.

The new pressure on Rishi Sunak comes as six former Secretaries of State for Work and Pensions write to him demanding that the £20-a-week uplift to Universal Credit – introduced as part of emergency spending during the pandemic – be put on a permanent footing.

Research from the think-tanks accompanying the letter calculates that the £20 uplift – a temporary measure due to end in September – has spared hundreds of thousands of people from destitution.

Although the number of people claiming benefits has risen from 3 million to 6 million during Covid-19, the Legatum Institute estimates Universal Credit has saved a further 650,000 people from falling into poverty over this timeframe.

The Legatum Institute’s report, Nowcasting Poverty – Quarter 1, 2021, notes that while 320,000 more people are in poverty due to Covid-19, this is far less than the potential 970,000 who would have been affected without the uplift in Universal Credit and Working Tax Credit.

Universal Credit, which was implemented to simplify the previous benefits system, has helped millions of Britain’s poorest and most vulnerable.

Keeping the uplift is set to cost the Government between £4.4 billion and £6.6billion annually, according to respective estimates from the Office for Budget Responsibility and HM Treasury.

A parallel paper from the Centre for Social Justice, Universal Credit Update: pandemic, uplift, and Universal Support, explains how the system is well-adjusted to deal with the economic affects of the pandemic, but requires further investment and support from the Government. 

It points out that the annual £5 billion extra required pales in comparison to the £60 billion spent on job furlough, which has a potential fraud/error margin of 5-10 per cent according to the HMRC.

In a rare move, previous Secretaries of State for Welfare have joined forces to ensure the Chancellor does not scrap the vital £20 uplift.

The six former welfare chiefs who signed the letter were:

1. Stephen Crabb
2. Damian Green
3. David Gauke
4. Esther McVey
5. Amber Rudd, and
6. Sir Iain Duncan Smith

It declares:

“As former Secretaries of State for Work and Pensions, we are writing with one voice to support those individuals and families that are struggling most in the wake of the pandemic, and to ask that the current funding envelope for individuals on Universal Credit be kept at the current level. 

“The Government’s increase in the payment of Universal Credit (“the £20 uplift”) has been vital for protecting the incomes of many families and providing support to the economy.

“We congratulate the team at the DWP for the way Universal Credit has performed to support a further 3 million people during this time. 

“Work remains the best way out of poverty for those who can work, but we want to make sure that those who cannot work are supported with dignity.”

Former Tory leader Sir Iain Duncan Smith, who founded the CSJ, said:

“One of the greatest, but unremarked, successes of the Government’s response to Covid has been the benefit system. Universal Credit has held up well as a system for distributing money to those who need it, and the extra £20 added to has been essential in allowing people to live with dignity. 

“Today all six former Conservative Secretaries of State for Work and Pensions have written with one voice to urge the Chancellor to protect the extra money he has invested in Universal Credit.

“As such, this investment should be at the heart of what makes us Conservatives: delivering the policies needed to provide businesses and people across the UK with opportunities to prosper, whilst simultaneously providing support to those at risk of being left behind. 

“A failure to act would mean not grasping this opportunity to invest in a future with more work and less poverty and would damage living standards, health and opportunities for some of the families that need our support most as we emerge from the pandemic.”

Baroness Philippa Stroud, CEO of the Legatum Institute said:

“Our analysis shows that the Government’s investment in Universal Credit has provided vital support to protect many families from the economic fallout of the pandemic. Without this, many more families would be in poverty than is currently the case.

“To ensure this continues as we begin to adapt to life after, or living with, Covid-19, there is a clear need for this investment to remain in place as part of a comprehensive anti-poverty strategy. This must be placed at the heart of the UK’s Covid-recovery response.”

Andy Cook, Chief Executive of the CSJ said: 

“Over 3 million more people are now reliant on UC than before the pandemic, many with pre-existing financial commitments. The vast majority of the increase in welfare costs to the DWP has not come from the uplift, but from the increase in the caseload.

“The CSJ therefore supports making the uplift permanent, and backs further investment in UC.

“We also recognise that, aside from the economic impact of the pandemic, the root causes of poverty are often social, and those facing the most complex obstacles to employment would be helped most through rolling out Universal Support, which our paper describes in depth.”