Improving the economic security of key workers is good for us all

In Britain today, employment does not always guarantee security. 18 percent of working households are in poverty and 40 percent of those on Universal Credit are in work. Yet even these shocking statistics hide the many other ways in which people may feel insecure.

To uncover these insecurities, in 2020 we set up the Economic Security Observatory. We define economic security as “the degree of confidence that a person can have maintaining a decent quality of life now and in the future given their economic, financial, and social capital”. As such, we view economic security as a wide interaction of forces, beyond the purely financial.

We summarise these forces under three pillars: home life, health and wellbeing, and economic life. For instance, inadequate housing, expensive and inflexible childcare, poor mental or physical wellbeing, insecure contracts, and low pay all contribute to insecurity.

Today we launch Key workers in the pandemic, the largest study of key workers of its kind. The report documents the many ways in which key workers face significant economic insecurity. It calls for the government to:

1. Instate a more generous and universal Statutory Sick Pay, in line with OECD averages.
2. Implement a ‘Good Care Work’ strategy to enshrine ‘good work’ within social care. This would give an offer of permanent contracts to those on zero-hours, and provide better progression routes for care workers.
3. Pay all key workers, including those in the private sector, the real Living Wage by 2024.
4. Hire 108,000 full time nurses to take workload pressure off healthcare workers and support their wellbeing.
5. Give essential retail workers extra protection by making it a specific offence to abuse retail staff.
6. Treat childcare as infrastructure by making it more affordable and flexible: set a childcare cost cap of 10 percent of income, and extend provision beyond the stereotypical nine to five working week, which is not the experience of many workers including shift working key workers.

These policies will, of course, be good for key workers. From a moral standpoint, it’s crucial that those who helped us through the pandemic should be rewarded. But this agenda also has wider benefits for society, for many employers, and most of all for the economy.

Society will benefit

Many jobs are important to society, but it is only key work that is defined by its centrality to a functioning society. Put another way, key workers are critical ‘human infrastructure’, enabling everyone else to have good public services, to work, and to raise families. Improving the conditions of key worker jobs and attracting new people into the roles will pay dividends for society. This will become increasingly clear as we deal with fallouts of the pandemic, such as increased demand in health and social care.

But some of the policies above - increasing Statutory Sick Pay, making childcare more affordable and flexible – are not limited to benefitting only key workers. Giving everyone extra security when unwell, and making it easier and cheaper to raise a family, would reduce insecurity across the board.

Employers will benefit

We believe that reducing insecurity is not a zero-sum game, or a battle between workers and bosses, but an agenda which works for everyone.

For instance, presenteeism (going to work when unwell) represents a bigger cost to employers and productivity than absenteeism (skipping work when healthy). In 2016 the average cost of presenteeism per employee per year was £851, while for absentees this figure was £299. In our research with key workers, we found that financial insecurity was one of the main reasons why key workers felt pressure to work when unwell. Improving Statutory Sick Pay should therefore aid the reduction of presenteeism and improve productivity.

Equally, policies such as improving the affordability and flexibility of childcare opens up a wider pool of workers, especially in a nation with such internationally expensive childcare and where women take up most of the slack. Also, improving the pay and conditions of health and social care workers should improve recruitment and retention.

The economy will benefit

There are two main reasons why reducing economic insecurity among key workers and across the labour market is good for the economy.

First, key work makes up roughly one third of the entire labour market and contains some jobs with comparatively low pay. Giving a pay boost to the 803,000 supermarket and care workers who earn below the real Living Wage would raise income within other low-paying industries and give a boost to the economy.

Second, when childcare, healthcare, or social care services are well provided and made affordable, they allow others to work, seek new opportunities, and could free up productive capacity.

Good for workers, good for the country

To ensure we ‘level up’ the country, and ‘build back better’, we must take a holistic view of people’s lives and of the economy. Insecurity is felt in many different ways and takes many different forms. So, our solutions to insecurity must be equally multidimensional. Tackling economic insecurity is not just good for workers, but good for the country too. Our agenda offers a means to do this.