Addressing the Underpayment of Carers: A Priority for Our Society

Carers’ wages continue to decline, impacting their livelihoods and the quality of care they can provide. Wages are being kept artificially low by government policies that cap spending and an over-reliance on inexpensive imported labour. This not only affects carers financially, but also jeopardise the sustainability of quality of the care they provide.

The issue of carer wages in the UK has been critical for decades. The latest data shows that things are getting even worse, as hourly wages fail to keep pace with inflation. As a result, carers are effectively earning 7% or £1.15 per hour less today than they were prior to the pandemic.

The key drivers of this seem to be the impact of the global pandemic, which would arguably have worn off by now (and did seem to be wearing off), carers’ addition to the Skilled Worker Shortage Occupation List bringing more workers in from abroad, worsening economic conditions in other sectors bringing new people in from retail and entertainment, and increasingly tight local government budgets causing councils and the NHS to refuse any increase costs to the point that agencies were and are handing back contracts.

The Data

Here we see private sector data from our two-sided marketplace, over which we exert no price control. It shows how the pandemic impacted wages, followed by a period where wages seemed to be catching up with inflation. However, carers were then added to the Skilled Worker Shortage Occupation List, which was immediately followed by an eight-month stall in wage growth. As a result, thousands of carers and their families fell behind economically and they remain significantly disadvantaged today.

At PrimeCarers we believe that carers should be paid fairly, and we don’t think that it is too much to ask to have hourly rates, at least, keep in line with inflation. Here we examine each of the major factors that are driving real wages down below inflation.

Global Pandemic:

The global pandemic significantly impacted wages for hourly carers. Families, concerned about the risk of infection, took extensive measures to limit exposure to their vulnerable loved ones. Despite the pandemic’s conclusion, carer wages did not recover immediately, which was influenced by several key factors:

• Families developed coping strategies to manage the new care dynamics.
• Friends, neighbours, and other relatives were enlisted to provide support.
• Elderly and vulnerable family members were often moved into family homes to ensure safety.
• Technological solutions were adopted to facilitate remote care.
• Many individuals acquired care skills and transitioned into the care sector soon after the pandemic, bolstering the workforce.

However, wages were closing the gap with inflation. This was stopped dead by the inclusion of carers in the Skilled Worker Shortage Occupation List.

The Skilled Worker Shortage Occupation List:

As demand recovered in 2021/2022, carers became scarce, and wages rose more rapidly than inflation. However, carer scarcity led to people going without care as government organisations refused to increase their price caps. To relieve the pressure, in February 2022, the government added carers to the Skilled Worker Shortage Occupation List, making them eligible for the Health and Care Worker Visa. It as at this point that carer wages diverged from inflation once again and flat-lined for the next eight months.

It must be noted that just because two events are correlated does not imply a causal relationship between them. However it is well understood that if you increase the supply of labour then, ceteris paribus, the price of labour falls. It would be an incredible coincidence that a policy designed to increase worker supply and decrease worker cost had nothing to do with an immediate fall in real wages. Therefore, it is highly likely that the addition to the Skilled Worker Shortage Occupation List caused the fall in real wages.

Despite recent policy adjustments, we have yet to see any abatement in the numbers of people with no right to work or only via their sponsored visa. This has risen as a proportion of applicants from the mid 20% in January to the mid 30% in May. Thus, this pressure on wages shows no signs of abating.

Worsening Economic Conditions:

We have also seen an influx of workers into care, as other sectors such as brick-and-mortar retail shut down, alongside restaurants, pubs, and other entertainment venues. This increase in the supply of carers also contributed to wage suppression.

Increasingly Tight Local Government Budgets:

Local councils, constrained by budget limitations, often cannot afford to increase carer wages. This has led to situations where care organisations have return contracts to councils, as they are unable to deliver services at unsustainable financial levels. This became particularly acute in late 2021.

Is this a problem that the country wants to solve?

No, probably not.

Sadly, the care industry does not exist to pay carers a fair wage; it exists to care for people that need it. In the face of an increasingly elderly and ill population, demand looks to be on the rise. Left to our own devices, wages would increase, more people would enter the market, and demand would be fulfilled, with those that can’t afford care turning to family, friends, and the government.

The government has other plans, as they do not want to pay for more care at a higher rate. They continue to choose to protect our institutions and our NHS at the expense of carers everywhere. They have turned to demand suppression, using price caps to keep hourly wages artificially low, and supply expansion, opening up multiple corridors for workers from abroad to come in and help people who need it. This has spilt over into the private sector, depressing wages for everyone.

It pains me to conclude that this is not an issue that the country actually cares about, nor wants to solve.

Why should we want to solve this problem?

Care is a profoundly challenging profession; it is both physically and emotionally taxing. While it can be immensely rewarding, it also often involves difficult and sometimes hazardous tasks that go beyond the demands of any other job. Carers require a high level of dedication to provide quality care, and they often find themselves in sanitarily compromised situations, having to endure verbal and even physical abuse.

It is crucial that carers are compensated fairly to ensure they remain in the profession, motivated by more than just the necessity to care for others. Adequate compensation not only helps retain them during tough times but also acknowledges the critical role they play in our healthcare system. Carers leaving due to poor pay causes suffering to their patients and burdens the rest of society. Over a third of ambulance and A&E visits are by people over the age of 75, and this figure grows annually. It is unsustainable. We have to do something about it, and it isn’t just us saying it; the King’s Fund agrees (the premier independent healthcare think tank).

Other report that the Return on Investment into care is as high as 600%; it just makes sense.

Maintaining artificially low pay for such a vital job is not only unjust but economically shortsighted. It is essential that we reevaluate and increase the wages for caregivers to reflect the true value of their work and ensure the sustainability of quality care in our society. It is financially irresponsible not to.

If there was a will, there would be a way:

If we did want to pay carers a fair wage then there are two easy, but expensive, ways to go about bringing carers back into line with the rest of the economy:

• Increase demand: Councils and the NHS could pay more per hour to carers working for government-funded clients, thus relieving the pressure on the organisations that have been forced to hand back government contracts. This would see carers get paid more, at least in the short run, so long as additional supply does not return to push wages back down.
• Reduce supply: By removing carers from the Skilled Worker Shortage Occupation List, the supply of carers would no longer be artificially increased. This would force councils and the NHS to pay more for care, bringing wages back into line with inflation, permanently.

Both approaches achieve the same end and both would be expensive, either directly or indirectly. That is why successive governments have refused to intervene.

So we propose a third way: Lower the overhead costs to deliver care.

• Lowering Overhead Costs with better organization and technology: One effective strategy to manage care costs is to reduce the overhead associated with care delivery. Traditional agencies often inflate costs due to administrative overheads, such as office expenses, staffing for coordination, and multiple layers of management. Why not automate this by turning to platforms that have already cut these costs?

This model would not only support fairer wages for carers but also improves the continuity and quality of care received by clients. However this is only a stop-gap measure that would only buy us 5 to 10 years.

In summary:

This will be expensive. For decades now, in order to avoid properly funding local councils and the NHS, and to prevent the costs of care from ballooning as demand increases in line with our increasingly elderly and ill population, we have turned to low-cost imported labour.

It is an addiction that we don’t want to give up; we can’t afford to.

Despite that, we insist that we must. The care of our most vulnerable populations is a measure of our society’s values. By allowing the continued underpayment of those that help the most needy in society, we neglect the heart and soul of our community. It is imperative that we address these issues promptly to make care a respected and viable profession, reflecting its importance in enhancing the quality of life for many.

Disclaimer

To be crystal clear: We have no issue with immigration; a huge portion of our esteemed colleagues are born outside of the UK, they do sterling work, and we support them wholeheartedly. We care about carers, what they earn and their families’ well being. So when we talk about carers, we include everyone working as a carer in the industry today, no matter where they were born, nor when they arrived here to help us. If we want to see the wages of all carers increase, no matter where they are from, then we need to spend more on care and stop the mass importation of cheap foreign labour into the care sector.