Why don’t we just...
give key workers a pay rise?

The Covid-19 pandemic has shown us all just how much we need key workers. NHS staff, cleaners, carers, teachers, supermarket workers, delivery drivers and postal workers are the bedrock of our society. They have kept the country going during this crisis.

During the first wave of the pandemic people across the country appeared on their doorsteps to clap and cheer in support of those who proudly put themselves on the frontline when the rest of us were told to stay at home.

We all want to thank key workers for the sacrifices they have made. But just saying thank you isn’t enough. Everyone who has kept Britain going during this pandemic deserves a pay rise, but late last year the Chancellor announced a public sector pay freeze that will hit the pockets of millions of key workers.

In April, £1.3 billion will be cut from key worker pay settlements in England this year. This is a bitter blow for many key workers – for the social care workers, refuse collectors, teaching assistants, the benefits advisers and staff at HMRC who have been on the frontline of the Covid crisis.

It’s a hugely regressive step. Public sector workers have already suffered from almost a decade of real pay cuts that have left them thousands of pounds worse off.

Many have made huge sacrifices, putting themselves and their families at risk through the lockdown to earn a wage. And despite doing essential work – caring for us and keeping our community services running – far too many of them are underpaid and in insecure jobs.

Workers who have carried the country through this crisis deserve to be rewarded fairly. But the unfairness is not the only problem. TUC analysis shows that a public sector pay freeze won’t affect those workers alone. Cutting key worker pay weakens wage growth for other workers too – especially those in jobs that directly depend on consumer spending.

Our analysis calculates the wider hit to the economy from the Chancellor’s cuts. It will knock £1.7 billion off England’s economy this year.

We found that northern regions face the biggest hits relative to consumer spending. The North West economy faces a £243 million hit, the North East £81 million, and Yorkshire and the Humber £163 million.

This will widen inequalities between English regions. And it runs against the prime minister’s promise to level up differences between communities.

If public sector key workers are forced to tighten their belts, the reduced spending will hold back the recovery of businesses in the north. And that will hold back other workers’ pay.

We are all part of the same pay circle. When a key worker spends their wages, it goes into other people’s pay packets. Coffee shops, gyms, bars, factories and many other workplaces need strong spending as we come out of the pandemic to keep people employed and improve their pay.

The Chancellor must not repeat the mistakes of the 2010s. Millions of public sector workers saw their pay capped by George Osborne. They lost thousands of pounds. And the knock-on impact was pay stagnation across the economy, and the worst slump in living standards in more than 200 years.  We need an approach that recognises decent pay and economic success go hand in hand. The fastest way to build back from this pandemic is by protecting pay and providing decent work for all. And the government must lead the way with the key workers who have kept the country going in our darkest hour.

Trade unions are calling on Rishi Sunak to reconsider the pay freeze and commit to policies that will improve pay and conditions for all key workers.

Firstly he should commit to fair pay rises for key workers in the public sector – with a plan to restore wages to their levels before austerity.

He should also guarantee that all outsourced public sector workers get a pay rise, with none of them on less than the real Living Wage.

And he should ensure that every key worker in every sector gets fair pay by raising the national minimum wage to at least £10 per hour.

Good government means seizing this opportunity. The March budget is a chance to truly thank key workers, not by clapping on the doorstep, but by creating an economy that helps workers, their families and their communities to thrive.

Frances O’Grady is general-secretary of the Trades Union Congress (tuc.org.uk)