TUC says £15 minimum wage for care workers would boost economy by £7.7bn

The TUC has published new research claiming that a £15 per hour minimum wage for care workers would boost England’s economy by £7.7bn.

The TUC’s research found that a £15 minimum wage across the social care sector would mean:

• An annual full-time wage of at least £29,250 for care workers
• Pay rises for 541,700 care workers across England
• Pay boosts for high numbers of women workers (who make up 79% of care workers) and BME workers (who make up 31% of care workers), helping to reduce gender and race pay gaps

The union body called for the cost to be met by the Treasury rather than cash-strapped local authorities still burdened by austerity cuts imposed since 2010.

The TUC said the net cost would be substantially lower than the £5.9bn upfront requirement because the Treasury would benefit from higher tax revenue, reduced in-work benefits payments and the economic impact of additional consumer spending.

There are 1,790,000 posts in social care, but around 165,000 of these are vacant. The vacancy rate increased to a record 10.7% in 2021/22.

The shortage of care workers has led to a surge in the number of people waiting for social care assessments, and millions of hours of commissioned home care going unprovided.

Low pay and job insecurity are the main cause of the recruitment and retention crisis. Nine out of ten care workers earn less than £15 per hour and many care workers are paid less than the real living wage (£10.90). Almost a quarter of workers in the sector are employed on zero-hours contracts.

The TUC calculated which regions and local authorities would gain the biggest economic boosts relative to population size. The top three regions are the East Midlands, North East and North West.

The top 10 local authorities are:

1. Sefton
2. Nottingham
3. Leicester
4. Torbay
5. Liverpool
6. Hartlepool
7. Stoke on Trent
8. Blackpool
9. Bedford
10. Newcastle upon Tyne

Alongside a £15 minimum wage in social care, the TUC called on ministers to take the following steps to improve care work and the quality and reliability of care services:

• Establish a sector Fair Pay Agreement to negotiate minimum standards of employment in social care covering all social care workers
• Ensure good employment conditions for care workers, including proper sick pay and ending zero-hours contracts
• Develop a new National Social Care Forum to coordinate the delivery and development of services and agree a new workforce strategy
• Launch a long-term, sustainable investment plan to fund high-quality social care employment and services
• Reduce the role of private sector providers and move towards insourcing of care services

TUC General Secretary, Paul Nowak, said: ‘Most families need social care services at some point. And we all want to know our loved ones will receive a high standard of care. But that’s only possible if social care jobs are paid well enough to attract and retain the right people.

‘We’re calling for a £15 per hour minimum wage across the adult social care sector. This will reduce staff turnover and help fill the thousands of vacancies in care services.

‘There’s another upside. Our research shows that raising social care wages to £15 per hour will have wider economic benefits where care workers live and work. When they spend their higher wages, local businesses will get a boost. And that will support job creation and higher wages for other workers too.’

Image: Ehimetalor Akhere Unuabona