As Low Pay Commissioners, we know that it is not enough to rely on data alone in making our recommendations to government on the National Living Wage (NLW) and National Minimum Wage (NMW) rates. In addition to the economic and labour market data, we also travel around the UK to listen to the experience of workers, employers and others. We get a sense of what their priorities are and pick up new insights that might not yet be visible in the data.
Sometimes we get lucky and see early examples of gutsy, pioneering work that could point to new solutions to deep-rooted problems. In this blog we want to highlight two examples of this that we heard about on our trip to Wigan and Manchester last month.
Wigan Youth Zone
We know the facts: real average weekly earnings (excluding bonuses) grew by 1.9% in the year to June 2019 - the fastest rate since October 2015 (when inflation was near zero) - though wage packets still haven’t reached the end of their long journey back to pre-recession levels.
Increases in the NLW and NMW have meant that growth for the lowest-paid has been higher than the average, with over 1.6 million workers seeing increases as a result of the 4.9% increase in the headline rate of the NLW in April this year.
But no backslapping yet - real average earnings are still about £4 lower than they were at the 2008 peak, and progress in living standards has not been evenly spread across generations. Pensioner poverty has fallen rapidly and poverty rates for baby boomers now entering retirement is the lowest on record, according to the Resolution Foundation. Millenials, though, are on course to face record levels of working-age poverty. This issue has wider causes than just low pay - but that, of course, plays an important part.
It was for this reason that we were so inspired to see the work being done by Wigan Youth Zone. Started in June 2013, the aim of this charity organisation is to provide the town’s young people with somewhere to go, something to do and someone to talk to. The centre describe themselves as a “purpose-built, state-of-the-art youth facility in Wigan town centre.... It offers young people from across Wigan the opportunity to meet friends, have new experiences, learn new skills and access the support they need to develop and achieve their potential. The Youth Zone is open to all young people across Wigan aged from 8 to 23, striving to offer something for everyone, regardless of their interests or abilities."
What was also interesting, given that we were visiting during school holidays, is that the centre is providing low-cost child care over the summer, which we know goes a long way in helping parents who are ‘just getting by’ with very welcome help. When we spoke to low-paid workers elsewhere on our visit, the cost of childcare was a real issue.
The statistics speak volumes about what the Youth Zone is achieving. An impressive 80% of young people who participate in the ‘Get a job' course go on to enter employment or training. But it is about so much more - building confidence, finding purpose, developing healthy habits and building skills. Local police say the centre has reduced crime and anti-social behaviour in the area.
It was great to hear that other cities are in the process of trying to replicate the model, because we know that one part of the solution to tackling low pay is ensuring that people can develop the skills they need and find the jobs to use those skills
Greater Manchester Health and Social Care Partnership
As Commissioners, we hear on every trip we make about the pressures faced in the social care sector. In previous reports, the Low Pay Commission has highlighted that cost increases, including from the NLW, have in many cases not been matched by rises in fees paid to providers for Local Authority-funded care.
We therefore welcomed hearing from the team in Greater Manchester about the scheme they are piloting, which has its roots in the area's devolution and the integration of health and social care services.
It is too soon to assess the impact of these changes, but we applaud the courageous decisions, based on detailed analysis of how to improve outcomes and raise standards for those being supported by care in the home. These decisions include transforming job roles and enhancing care staff’s skills. to create more ‘blended’ care and health roles. As well as leading to better outcomes for people supported, these new roles also mean better career pathways, improved terms and conditions and better pay for employees, moving up to £9 an hour.
The focus is on improving the quality of care, promoting independent living and aiming to drive down demand for services through improved health and care outcomes. Staffing is one of the key strands of this, with higher pay supporting a more skilled care workforce that is easier to recruit and retain.
We particularly welcome this pilot because all too often we hear from employees in the care sector that pay and conditions just aren’t up to scratch. UNISON officials we met earlier in the visit told us that members frequently report unpaid travel time, basic underpayment of wages and a race to the bottom in care conditions. All of this makes it hard for carers desperately trying to provide a decent service to those who need care.
Credit to all involved in these innovations. While a tight labour market can take us some of the way towards healthy pay recovery, we will need innovative and forward-looking practices like these to help us get there. What we saw and heard in Greater Manchester gives us real cause for hope.
Thanks to everyone who took time to meet with us.