Living Wage is a sideshow

Posted on September 7th, by geoff in CT blog. 1 Comment

By Caring Times editor

Geoff Hodgson

Making the National Living Wage (NMW) the baseline remuneration for all workers, across all sectors, will do little to benefit the material wellbeing of care workers in care homes.

Over and above the temptation for employers to recruit younger workers, who they can pay less, will be the general inflationary effect as workers pressure employers to maintain pay-differentials. Workers on the lowest rung of the pay ladder will see their uplift quickly eroded by higher prices, higher rents, higher utility bills, so we can cancel out the impact of the NLW on one side of the equation and higher prices on the other, leaving the lowest paid pretty much where they started.

Besides, some care providers have already taken the lead on this, paying their care workers the equivalent of the NLW or above. Admittedly, these tend to be ‘premium’ providers catering almost exclusively for the self-funded market, or charitable providers who are under less pressure to provide a return to shareholders or other equity partners. For those private providers who are reliant on contracts with public bodies, the social care sector has become a very unfriendly place and paying staff more is not an option consistent with business viability.

Governments, however, are inured to cries of dark foreboding and the numbers of publicly-funded older people living in care homes are being steadily whittled-down. I’m not optimistic about the Comprehensive Spending Review in November – policymakers may ask ‘why prolong the agony?’ when the long term goal is to have, with some obvious exceptions, a totally self-funded elderly care sector.

  • The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.

One response to “Living Wage is a sideshow”

  1. Bob Ferguson says:

    If the argument about NLW increases being eroded by this, that and the other (price inflation) is taken to its logical conclusion, there would be no point increasing wages, by whatever method, at all. Current thinking in HM Treasury is to aim for the NLW to be set at 60% of median wages by 2020. One way to cover most, if not all, bases would be to follow the model set for the state pension (although without the 2.5% guarantee): that is, benchmarking NLW increases against whatever is the higher of inflation or wages (a double lock). Neither, I suspect, will stop providers crying into their beer.

    Who knows what, if anything, the spending review will bring. Perhaps nothing; perhaps no cash, but an immediate review of actual care costs – similar to what happened when providers of early learning services erupted at David Cameron’s promise to double the free hours in children’s nurseries. That would both delay the pain and placate councils and, possibly, providers.

    Anyone who has taken the trouble to read the report with which local government lobbied the Government on care funding will know that additional funding may come with strings for providers. It is worth reading, I assure you.

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