Higher minimum wage ‘would boost the economy’

RAISING the minimum wage to £15 an hour across the social care sector would boost the city’s economy by £76 million a year, the TUC claims.

Leicestershire would benefit by £92 million and Rutland by

£6 million, it said.

The union umbrella organisation said the social care workforce accounts for £52 billion of England’s economy.

There are 1,790,000 posts in social care, but about 165,000 of these are vacant. The vacancy rate increased to a new high of 10.7 per cent in 2021/22.

The TUC said as a consequence the shortage of care workers has led to a surge in the number of people waiting for social care assessments, and millions of hours of commissioned home care going unprovided.

It said low pay and job insecurity are the main cause of the recruitment and retention crisis:

Nine out of 10 care workers earn less than £15 per hour and many care workers are paid less than the real living wage (£10.90).

Almost a quarter of workers in the sector are employed on zero-hours contracts.

The TUC said its research found a £15 minimum wage across the social care sector would mean:

■■An annual full-time wage of at least £29,250 for care workers;

■■Pay boost for high numbers of women workers, who make up 79 per cent of care workers, and black and minority ethnic workers (31 per cent), helping to reduce gender and race pay gaps;

■■Pay rises for 541,700 care workers across England.

The union body is calling for the cost to be met by the Treasury, rather than local authorities.

The net cost would be substantially lower than the

£5.9 billion upfront requirement to bring pay up to £15 per hour for all care workers.

This is because the Treasury would benefit from higher tax returns and reduced in-work benefits payments, and from the economic impacts of the additional consumer spending.

TUC regional secretary Lee Barron said: “We all want to know our loved ones will receive a high standard of care.

“But that’s only possible if social care jobs in the East Midlands are paid well enough to attract and retain the right people.

“We’re calling for a £15 per hour minimum wage. This will reduce staff turnover and help fill the thousands of vacancies.

“There’s another upside. Our research shows that raising social care wages to £15 per hour will have wider economic benefits where care workers live and work.

“When they spend their higher wages, local businesses in the East Midlands will get a boost. And that will support job creation and higher wages for other workers, too.”