£15 minimum wage for care workers would boost England’s economy by £7.7 billion

11 May 2023 11:38 AM

New research published today (Thursday) by the TUC provides a local breakdown of the financial benefit to the care workforce, and the wider economic benefits, of raising wages to a fair minimum of £15 per hour across the social care sector.

• NEW LOCAL AUTHORITY DATA shows the economic impact of a £15 minimum wage for care workers in every community
• Northern and Midlands towns with higher levels of income deprivation would benefit most
• £15 minimum wage for care work would help end the recruitment and retention crisis and raise standards of care, says TUC

Investing in the workforce to end the social care crisis

The social care workforce accounts for £52 billion of England’s economy (GVA).

There are 1,790,000 posts in social care, but around 165,000 of these are vacant. The vacancy rate increased to a record 10.7% in 2021/22.

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.

Low pay and job insecurity are the main cause of the recruitment and retention crisis:

• Nine out of ten 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 (24%) of workers in the sector are employed on zero-hours contracts. 

The TUC’s research finds that 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 rises for 541,700 care workers across England.
• Pay boost for high numbers of women workers (who make up 79% of care workers) and BME workers (who make up 31% of care workers), helping to reduce gender and race pay gaps.

The union body is calling for the cost to be met by the Treasury, rather than local authorities that remain cash-strapped following cuts since 2010 to the overall funding they receive from central government.

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.

Regional and local impacts

The TUC research calculated which regions and local authorities would gain the biggest economic boosts relative to population size.

The top three regions in ranking order, along with their annual economic boost:

1. East Midlands – £803 million
2. North East – £422 million
3. North West – £1,111 million

The top 10 local authorities, along with their annual economic boost:

1. Sefton – £47 million
2. Nottingham – £53 million
3. Leicester – £58 million
4. Torbay – £22 million
5. Liverpool – £74 million
6. Hartlepool – £14 million
7. Stoke on Trent – £39 million
8. Blackpool – £21 million
9. Bedford – £27 million
10. Newcastle upon Tyne – £43 million

See the notes for data on all English regions and all care-providing local authorities.

Upgrading care work and care services

Alongside a £15 minimum wage in social care, the TUC is calling for ministers to take the following action to improve care work and the quality and reliability of care services:

• Establish a sector Fair Pay Agreement to negotiate minimum standards of employment in social care covering all social care workers.
• Ensure good employment conditions for care workers, including proper sick pay and ending zero-hours contracts.
• Develop a new National Social Care Forum to coordinate the delivery and development of services and agree a new workforce strategy.
• Launch a long-term, sustainable investment plan to fund high-quality social care employment and services.
• Reduce the role of private sector providers and move towards insourcing of care services.

Click here for the full press release