A busy London street with Big Ben in the distance

New rights for UK workers are unlikely to put enough money in the pockets of those who need it

Sarah was in a comfortable job, working for an archaeology business before being diagnosed with cancer. Much of her 20-year career had left her with reliable employment rights in the civil service.

But having made a career change and moved to a small business, she was now reliant on statutory sick pay, just over £100 a week at the time. To avoid a catastrophic loss of income, she had to work from her hospital bed in between sessions of chemotherapy, before being forced to return to work just weeks after a bone marrow transplant.

This is a stark reminder of how anyone can have the fundamental dignity of life stripped away.

Many of the lowest-income families continue to face unacceptable levels of hardship. But these pressures have spilled into higher earners, too. Those out of work continue to face the greatest risk of being in poverty, but rising costs and largely stagnant incomes have meant that many more people are living on inadequate wages.

The government has rightly recognised the current settlement stores up huge problems. The Employment Rights Bill, laying out the details of the government’s “make work pay” policies, has been presented to parliament and has been described by Labour as “the biggest shake up-in workers’ rights in 30 years”.

But is it really a gamechanger? While the package undoubtedly contains reforms that will improve the working lives of millions, it’s worth considering how far these go in raising living standards.

Affording a decent life

Using the minimum income standard benchmark developed by the Centre for Research in Social Policy, two measures can be assessed: baseline hourly pay and reforms to statutory sick pay.

The work we do at the centre, where I am co-director, sets out what the public thinks everyone needs for a minimum standard of living in the UK today. Through hours of discussions and deliberations, groups decide what households need to live in dignity.

This is not just about being able to afford the basics – it is about being part of society, feeling included, connecting with others, and thriving rather than just surviving. We’ve updated this minimum income standard research every year since 2008, tracking what the UK public thinks is important to live a dignified life, and in September we published our latest update.

This research highlighted the strains on public services and what this can mean for the costs faced by households. For the first time, groups included £200 a year per adult to spend on private health services like counselling or physiotherapy. Accessing these services can be critical in avoiding long periods of time off work.

But costs like this potentially add to the financial pressures already facing millions of workers. Our analysis of household incomes shows that 64% of households without the income they need for a dignified life include at least one adult in work – that’s around 3.3 million working households.

The bill is intended to support low-paid workers, and while the proposed changes are a welcome and long-overdue step, the measures focused on income do not go as far as they could.

There are two key components. First, the current national living wage (NLW), payable to employees over 21, and what the prospective increase might look like in the next year. We know from our latest research that even where both parents are working full time on the NLW, a family with two children still fall around £140 a week short of the income they need for a minimum standard of living.

Continues…

For the full article by professor Matt Padley visit the Conversation.

Notes for editors

Press release reference number: 24/181

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