Effort. Try a bit harder. This is what the prime minister is asking people to do in order to improve their living standards. When asked recently about working people being hit by cuts to Universal Credit he said:
“My strong, strong preference, and I believe this is the instinct of most people in this country, is for people to see wages rise through their efforts … rather than welfare.”
But from care staff and retail workers to delivery drivers and warehouse staff, the Covid-19 pandemic has shone a spotlight on the huge amounts of effort that millions of low-paid people already put in every day to provide our nation’s essential services. Their effort alone, however, has not been enough to improve their quality of life. The problem is not just that their pay remains stuck at too low a level. It is also the unreliability of the work and its failure to fit around the rest of their lives. As the pandemic hit, 4.2 million employees counted as low paid (that is, they got less than two-thirds of the median wage) and some 2.8 million employees reported varying hours, two thirds of whom also reported varying pay. In sum, getting a job and working hard at it should be a route to a more comfortable life, but too often it is blocked.
Life is a particular challenge for the disproportionate number of people who, however much they strive, face both problems at once: pay that is not only low but also unreliable. Crunching the government’s own Annual Population Survey reveals that almost a third of the lowest-paid fifth of workers are exposed to both variable hours and pay, more than twice the proportion as found among the richest fifth. It is very often the hardest-working and hardest-pressed of people—like those care workers whom Madeleine Bunting interviewed—who have the most juggling of unreliable earnings to do. Where low pay and insecurity coincide, families suffer. It’s hard to plan time with the kids when you don’t know if you’ll be working, and impossible to plan budgets if you don’t know when or how much you’ll be paid.
A moment for reset
Even before the virus, those who had their eyes open to the reality of our economy could already see how often work was not providing the promised road out of poverty, but was instead a dead end: the proportion of families in poverty despite being in work had been growing for many years. As we emerge from the pandemic, everyone at least claims to agree on the need for a reset. The prime minister has talked about building back better and levelling-up.
“Where low pay and insecurity coincide, families suffer”
At JRF we have been working directly with people with experience of in-work poverty. Working jointly with them, we have devised a set of specific recommendations (see opposite) to “make jobs work.” That means jobs where people are treated with dignity and respect, where people can work around caring responsibilities and health needs, and jobs that deliver the security and stability that people need to plan family life and finances. These are not unreasonable demands—they are the least that workers in a modern economy should have the right to expect. These are the types of jobs our recovery should be built on.
And there should be a vehicle ready for driving through exactly these sorts of changes. It is now two years since the government promised an Employment Bill to tackle some of the problems of insecure jobs in its manifesto and post-election Queen’s Speech. But in the more recent Queen’s Speech, it didn’t merely fail to materialise—it dropped off the agenda entirely. You might say a little more effort is needed right here.
Promissory notes, a vanishing Bill
The government is ready to extend flexible working round the edges, which is welcome. But it seems to have lost sight of the broader reforms it had in mind when, in December 2019, it promised that Employment Bill to “enhance workers’ rights.” By bringing forward the vanishing Bill, the government can truly advance the good, rewarding jobs that give people a sense of pride and a stake in society, and send clear signals to business about the type of recovery we want.
To make work more secure, the Bill should include a new right to a secure contract that reflects your typical working hours after 26 weeks of employment. The government has proposed that workers on a less secure zero-hours or short-hours contract should have a “right to request” more predictable working patterns, but without a mechanism to preclude knee-jerk refusal of that request, the basic power dynamics will go unchallenged, and little will change in practice. This should be flipped, so the default—after a decent spell with the employer—is greater security, with the right to request a more flexible (and less secure) contract where that is genuinely preferred by the employee.
Other new rights should include four weeks’ notice of your schedules, with the right to compensation for shifts cancelled within 24 hours of their start. Our conversations with people who have endured working poverty has included appalling examples of shifts being cancelled or curtailed late (see interview with warehouse worker James) which starkly exposed the need for greater protection. Should employers be required to compensate for lost income, it would be in their interest to plan their demand for labour with more care—helping drive business change.
Those with experience of in-work poverty repeatedly expressed their sense of being denied dignity: the feeling that workers were not treated as human beings by their employer, but instead as just numbers, or cogs in the machine. This was particularly acute when it came to acknowledging life outside of work. Desperately trying to juggle shifts and childcare or health needs can cause profound stress—as can having an employer who responds to requests for emergency time off without compassion (as some of the terrible testimony to Bunting makes plain).
There seems to be an entrenched expectation that employees will show unlimited flexibility to their employer, but get little back in return. The government has now signalled that the current “right to request” flexible work arrangements should kick in immediately, rather than after 26 weeks of employment. That is welcome, but the deeper problem is that this “right” is not strong enough.
Instead, the Bill should make flexible working an automatic option for all staff. While some exemptions for business reasons would likely still be needed, changing the default would put the onus on employers to explain why—in exceptional cases—they cannot accommodate flexible working, rather than it being on employees to try and persuade them that they should.
The ultimate indignity is the denial of legal rights, including sub-minimum-wage rates of pay. While most employers do the right thing, some do not and can sneak an unjust advantage by undercutting the rest. Better and more pro-active enforcement would level the playing field. That is the key challenge for the proposed new Single Enforcement Body: it needs double the current number of labour market enforcement inspectors to stand any chance of rising to it.
If not now, when?
By delaying a comprehensive Employment Bill, the government risks repeating the mistakes made after the 2008/09 recession: the recovery then was characterised by high employment, but with increasingly insecure work, rising in-work poverty and poor productivity. Employers cannot expect to get the best from their staff if they are stressed about making ends meet.
“The ultimate indignity is the denial of legal rights, including sub-minimum-wage rates of pay”
By pressing forward with the Bill now, the government can signal exactly how it plans to build back better, and give businesses time to adapt. The recovery appears to be gathering in strength, but even if there were concerns about the recovery, the government can and often does legislate for powers that can be “commenced” later, so there is no excuse for them dragging their feet in changing the law.
The specific reforms that we recommend will not bring large costs for most employers, but firms with business models that rely on cheap, insecure work will need to adjust. By the time the Bill comes into force, and any lead-in time for new measures has elapsed, businesses will have had time to recover and adapt their business models where necessary. Nonetheless the new measures can initially be approached with the same cautious rigour as accompanied the successful introduction of the minimum wage a generation ago—research informed a design which bedded-in before it was strengthened. That limited the unintended consequences—and ultimately achieved a reform that no-one would reverse today.
Ever since the Factory Acts of the 19th century, society has periodically needed to use regulation to strike out business models that rely on unnecessary suffering. As our economy, like those around the western world, endures not only the huge shock of the pandemic but also even deeper structural shifts—including Brexit, the green transition and broader technological change—we must do the same again. The government should begin by putting some effort into its Employment Bill.
