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The Weekly paper of the New Communist Party of Britain

Low pay nightmares

by New Worker correspondent

MONDAY saw the Resolution Foundation publish its annual Low Pay Britain report, which unsurprisingly is dominated by the effects of the impact of the COVID-19 crisis on low-paid workers. Equally unsurprising are many of the findings. It notes that “Workers in lower paid jobs have faced greater health and economic risks than high paid workers” and that a recovery that “builds back better” must be one which means improvements to both pay and job quality. It points out this means more than a minimum wage policy. Given that we have a Tory Government, the Foundation warns that: “There are major risks, in the shape of higher unemployment, decreasing job security and infringements of labour market rights ahead.”

The report opens by claiming that the pre-COVID-19 era was a positive one for low-paid workers, with the minimum wage boosting the lowest earners. The National Living Wage of 2016 saw minimum-wage workers getting £1,700 more last year than if the minimum wage had continued to increase at its pre-2016 pace. Apparently last year the proportion of workers on low pay (less than two-thirds of median pay) fell to its lowest level in 42 years, to 3.9 million compared with 5.5 million in 2015. The report does not say what more effective trade unionism could do.

Reading the small print also reveals that despite an increase in hourly wages, the proportion of workers on low weekly pay (28 per cent) is twice as high as the proportion in low hourly pay (14 per cent) and has only fallen by two percentage points since 2015, compared with the seven-percentage point fall in low hourly pay. This demonstrates that a reasonable number of hours, not excessive, are essential for a decent income. Unmentioned by the Foundation is the possibility that the rise in hourly wages has been met by bosses reducing hours, although it does make suggestions for allowing workers extend their hours.

It does point out, however, that low-paid workers bear the brunt of the crisis. In March more than a fifth of workers in the bottom weekly pay quintile had either lost their job or suffered reduced hours, or were furloughed, compared with less than only seven per cent in the top fifth of earnings. It is not clear if these figures include those low-paid workers from abroad who have simply given up and returned home.


It also makes the more dubious claim that just as low-paid workers have been worst affected by the restrictions on the sectors they work in, so the reopening of the hospitality sector should benefit low-paid workers the most as furloughed workers are returning to their previous jobs. It remains to be seen what happens when the Job Retention Scheme ends in September.

As was reported in our 21st May issue, Britain’s bosses have been moaning about a labour shortage that is threatening the unspeakable horror of rising wages. Even if there is an improvement in wages, the Foundation wisely notes that the problem of insecure jobs and the abuse of employment rights will not go away.

About a fifth of low-paid workers have an insecure job in the sense of a zero-hours contract, involuntary working on a temporary contract, or working a low number of hours and wanting more. Fourteen per cent of workers in the lowest pay quintile do not receive any paid holidays.


Even more scandalously, nine per cent did not even receive a payslip, which of course has long-term implications beyond their present-day low pay. After the 2007–8 financial crisis the proportion of low-paid workers in insecure work nearly doubled, rising from 13 per cent in 2008 to 24 per cent in 2013, so a further increase could come after this crisis.

The Foundation correctly says that the Employment Tribunal system is not effective at supporting low-paid workers, who are much less likely to bring cases than higher-paid workers. The Supreme Court’s ban on the Tory imposition of fees to bring cases has only made a small difference.


They find it “reassuring” that some furloughed workers have jobs, and sectors with 12 per cent of previously furloughed workers starting a new job, including seven per cent moving to a different job in a different sector. These were mostly from the retail sector, whose long-term decline has only been accelerated (but dramatically so) by the coronavirus. Where they are going to is not stated. It is unlikely that former shop-workers are going upmarket but there signs they are moving into the care sector, not noted for high wages.

Buried in the report is the useful detail that for many people, the minimum wage has become, as predicted by the NCP when it was introduced, the maximum wage. It notes that the hourly rate for what it quaintly calls “elementary occupations” (such as labourers, cleaners, factory workers, security guards, retail assistants and waiting staff) was £8.50 at the end of 2019, a mere 30p higher than the then adult-rate minimum wage.

The Foundation respectfully requests that the Government should make permanent the £20 boost to working age benefits due to expire in September. It mildly deplores the failure to introduce a promised Employment Bill and calls for a Single Enforcement Body to support those falsely classified as self-employed.

Other measures such as improving enforcement budgets have been very welcomed, but fines for minimum wage underpayment are so low that they are permits rather than punishments.

regular hours

On job security, the Employment Bill should introduce a right to regular hours that reflects workers’ normal hours worked, and minimum notice periods of the shifts or the hours they will work, along with compensation for late changes. That these demands should still be unmet 153 years after the foundation of the TUC shows how much the trade union movement has been weakened.