Why the foundational economy must be fair

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ViewsMay 18th, 2021

As lockdown restrictions ease, economic recovery must be fair.  Victoria Winckler, Director of the Bevan Foundation, looks at the experiences of workers in three key foundational economy sectors.

Fair work and the foundational economy, once again, feature in the new Welsh Government’s priorities. But new evidence from the Bevan Foundation – on social care, retail and hospitality – reveal that these twin priorities may be contradictory.  For one of the most striking features of the work in the foundational economy is how much of it is unfair.

The data on the characteristics of work in the foundational economy paint a bleak enough picture.  Low pay, no minimum hours of work and low trades union membership and recognition are all much more common in social care, retail and hospitality sectors than in any others.  Indeed, we estimate that around 44% of all low-paid jobs in Wales are found in these three sectors alone.  Boost pay here and the low pay problem in Wales would be almost halved.

But the published statistics say little about workers’ experiences.

We found that unfairness in the foundational economy goes beyond low pay and variable hours.

Across the sectors, we heard from workers being paid below the legal minimum wage. We also heard about working for long hours, sometimes without a break. There were accounts of people turning up to work when they are ill because there is no sick pay and of  inadequate training. And there were many examples of increased intensity of work and of discrimination and victimisation.

These findings are sobering reading. But for me the most striking experience, across all three sectors, was workers’ fear of losing their jobs. Workers were of course concerned about whether their employer would survive the pandemic. But they also lived with the daily fear that some minor infringement (or even nothing at all) would trigger a disciplinary or dismissal. Added to this, many workers felt dispensable. Their skills weren’t valued, their views were ignored and managers sometimes didn’t even know workers’ names. It’s not surprising that workers in these sectors report high levels of stress.

We may have called social care and retail workers ‘essential’ in the pandemic – but that is clearly not how some of their employers view individual workers.

If the Welsh Government is to continue to support the foundational economy, it must drive up terms and conditions at the same time. If it doesn’t, then its policies could increase the number of workers living in fear and on low pay. The social partnership bill is a step in the right direction for those parts of the economy reached by public procurement. But it will do little for retail and hospitality industries because the public sector rarely buys goods or services from them.

A forthcoming review of ‘what works’ to increase fair work will make clear that there is no single solution.  Efforts to boost social partnership need sit alongside better regulation and enforcement of legal minimum standards, investment in employee skills, more choice in local job markets and better run businesses.  These measures need to be an integral part of the Welsh Government’s development of the economy.

Victoria Winckler is Director of the Bevan Foundation

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