Tag Archives: Minimum wage

Fast food workers strike in the US, but who will unionise the UK’s chippies?

Jane Holgate WEB
By Jane Holgate, CERIC, University of Leeds

Low-waged workers in small workplaces are, statistically, the least likely to go on strike. They are unlikely to be unionised, are under close supervision from the boss and are easily replaceable. Traditionally, unions have paid little attention to these workers. Organising in small workplaces with high staff turnover provides little return for lots of effort.

Yet in the US, thousands of fast food workers from outlets such as McDonald’s, Domino’s and KFC have walked out of their workplaces taking their colleagues with them in a series of day-long strikes that began in 2012. The most recent of these involved coordinated action in 150 cities across the US last month.

But nothing of a similar scale has happened in the UK, and it doesn’t look like it will happen any time soon. The reasons for this go to the heart of the differences between unions on either side of the Atlantic.

Poverty wages

It is easy to see why campaigners in the US have targeted fast food. The industry’s workers are the lowest paid in the country, according to government data. Their median salary is just $11,000 per year. They also suffer a high degree of “wage theft”, where employers dock their pay or force them to work unpaid hours.

Workers are demanding the right to join a union and are pushing the Obama government to increase the minimum wage nationwide. Currently, the federal minimum wage stands at $7.25 but individual states and cities have the power to set their own rates above this figure. Since the strikes began minimum wages increases have been secured in seven states and two cities. SeaTac, near Seattle, in Washington State was the first city to win an increase to $15, followed by the city of Seattle itself.

Complex labour laws mean unions face difficulties getting recognised by employers and the unions often experience expensive legal challenges from employers. The unions and unionised workers also face intimidation and bullying from multi-million dollar union-busting companies. To avoid this, unions have adopted a new tactical approach to organising in this sector.

New tactics

Campaigners have targeted the state and federal legislatures to increase the minimum wage. As many fast food restaurants are franchises, the owners have little room for manoeuvre when it comes to wages, as the price of supplies and food is set and regulated centrally by companies like McDonald’s and Wendy’s. Low profit margins mean the owner of an individual McDonald’s franchise has little scope to increase wages.

The unions also chose to organise fast food workers in the community as opposed to in the workplace. They set up Fast Food Forward – a community coalition – where they have funded organisers to work with local groups and workers centres. Faith leaders in local churches and community activists have shown their support for the strikers. In one example, from late last year in New York, “Clergy and city council members walked a Wendy’s worker back in after her manager told her she was fired. The high-powered delegation convinced the manager to ‘unfire’ her”.

Workers are also legally protected from dismissal (largely), as it is unlawful to fire workers for attempting to organise a union.

Could these tactics work in the UK?

One reason this form of organising hasn’t spread to the UK is that local councils don’t have the power to set minimum wages. A minimum wage campaign could be directed at the national government, but unions in the UK have tended to use their political links with the Labour Party to press for demands for worker-friendly legislation and are unlikely to think it worthwhile to demand progressive labour laws from the current coalition government.

Unions in the UK also tend to be too focused on servicing their current members rather than on expanding into new, non-unionised workplaces. While some unions have adopted the language of organising, where this does take place, it tends to be where unions already have membership. For a typical UK union, a trip round the local high street’s fast food places would be a leap into the unknown.

It’s a leap the unions might be willing to take, if it weren’t for another problem: they simply don’t have the resources of their US counterparts. The UK trade union sector has seen merger after merger (a consequence of a failure to invest in organising) as unions need to consolidate in order to cut costs and survive.

In the US, unions are able to draw strength from being part of a wider tradition of community-based organising, including a number of national networks of faith-based and community coalitions. Geographically based community organising – while starting to take place in Unite, the largest private-sector union – is not a feature of UK trade unionism. But even Unite’s community membership is aimed at organising those not in work to campaign for social justice rather than workers in the workplace.

For unions in the UK looking enviously at the success their counterparts have had across the Atlantic, there are lessons to be learned. British trade unions could recast themselves as broader social justice organisations where their role is to create benefits for all workers rather than just their members. Forming genuine common-cause coalitions with progressive community organisations campaigning for social justice, instead of just requesting assistance when unions need support for an industrial dispute or campaign, could prove valuable in reaching into communities where unions do not have a base.

Further, the campaign for a living wage began in London in 2001 when London Citizens – a community coalition explicitly based on US organising tactics – began working with unions to secure wage increases for hospital workers in East London. Since then, this small organisation has managed to persuade dozens of employers to pay a living wage of £8.80 in London (£7.65 outside of London) per hour – £2.49 (£1.34) more than the national minimum. More than 100 local authorities have now committed to paying the living wage.

At the same time they have managed to shift the political discourse around low wages to that of a “living”, rather than a “minimum” wage, such that the Labour Party has committed to its introduction, should it be returned to government.

Unions need to get smarter and more flexible in the way they organise in order to adapt to the constantly changing labour markets and laws that make organising workers difficult. It can be done, but it requires a fundamental shake-up of the way unions currently operate and the adoption of more innovative and tactical approaches to organising.

Jane Holgate does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published on The Conversation.

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Paying the price for commissioning in social care? The minimum wage and domiciliary care work in the UK

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Chris Forde
Chris Forde is Professor of Employment Studies at CERIC.

@CERIC_LUBS

When The Low Pay Commission’s annual recommendations were released a fortnight ago, most attention focused on the 12p and 5p rises in the minimum wage for adults and 18-20 year olds. As in previous years, these recommendations have attracted headlines about the level of the minimum wage, and the effects of the NMW on employment. Yet, whilst there is broad consensus over the importance of setting a floor for wage levels, the focus on a minimum wage may detract attention away from the more fundamental problem of low paid jobs in the UK economy. Why are there so many low paid jobs in sectors such as hospitality, retail, social care and personal and protective services? There is a need for a clearer understanding of how a diverse range of factors, including employer strategies, government commissioning regimes, and sectoral norms combine to institutionalise low pay in particular sectors.

In this respect, it is worth focusing in on one of the LPCs supplementary recommendations in their 2013 report. The Commission has recommended that contracts issued by public bodies which commission the provision of social care should contain a clause requiring at least the NMW to be paid.  One in 12 jobs in social care were paid at or below the minimum wage by 2011 and there has been much interest from the LPC in whether the commissioning of social care by local authorities is a contributory factor.

Within social care pay in domiciliary care has attracted most attention, and it was this sector was the focus of my report with colleagues Ioulia Bessa, Sian Moore and Mark Stuart from the Centre for Employment Relations Innovation and Change (CERIC), for the LPC this year. Almost 700,000 workers are now employed in the UK providing care for people in their homes, with the number of jobs expanding rapidly as the population ages. As commissioning of public service delivery of domiciliary social care has increased, so the number of directly employed care workers has fallen sharply. A decade ago, most domiciliary care workers were employed by local authorities, whereas now they are much more likely to be employed through one of the 6000 registered home care providers in the UK. The vast majority of publicly funded home care is provided by these private and voluntary organisations through contracts commissioned by local authorities. A recent survey found that there was increasing pressure on providers in terms of what they can cost in contracts. Local authorities may effectively pay only for workers’ ‘contact time’ with a client, rather than including any provision for ‘travel time’ between visits, which can be considerable.

Our research was able to shed light on the realities of work and pay for those in front-line domiciliary care roles. First, we analysed a unique national dataset on employment in the domiciliary care sector, the National Minimum Dataset for Social Care, gathered by Skills for Care. This dataset contains information on pay levels for domiciliary care workers, although, critically, it does not allow us to identify directly whether travel-time is included in hourly pay. Nonetheless, even without adjusting for unpaid travel time, we found that between 2008 and 2012, 1 per cent of domiciliary care workers were paid below the minimum wage, a figure which rose to 2.5 per cent in 2012.   Our case studies of five local authorities all revealed that none currently specified payment of the NMW in its contracts or actively monitored compliance, although two had undertaken research on provider pay rates as part of budget scrutiny exercises and quality assurance. One local authority representative argued that it was not their responsibility to monitor compliance amongst its providers, noting: ‘That is their business, that’s not something that we would get involved in.  It is up to them how they deliver’.

We do make it clear in our report that these percentages should be seen as a lower-bound estimate of those paid under the minimum wage, as they do not take into account the significant amount of travel time that domiciliary care workers undertake within their working day. In our case studies, commissioning documentation sometimes explicitly stated that tenderers would not receive any separate payment from local authorities for workers’ travel costs and that they should cost travel time into their tender prices.  Yet providers typically set charge rates that did not incorporate travel time between visits. With tender contracts awarded on the basis of clear price and quality criteria, Commissioners were acutely aware of the potential impact of including travel time. As one noted:  ‘….we know the impact of not paying travelling time.  However, if it were to be included, it’s probably going to make the service unaffordable for us.  It’s a dilemma.  It doesn’t sit comfortably.… In terms of finance, I can’t give you a figure because we haven’t done that piece of work.  But yes, it would be significant, it would make a significant difference to the cost of the service at a time when we’re having to make huge cuts’.

The other factor that is crucial to understanding hourly pay for the domiciliary care worker is visit length. Most homecare visits being commissioned by local authorities are for periods of 30 minutes or less. For workers this may result in their work being arranged so that they have too many visits too close together or ‘call cramming’, resulting in their having to rush their work or leave a client early to get to their next visit on time.  Clearly, there are implications for compliance with the minimum wage, if extensive travel time is sandwiched between a series of short 15 minute visits, which are only paid for contact time. Some local authorities had begun to move away from commissioning 15 minute visits, and some paid enhanced rates for shorter visits. At one local authority in a semi-rural location, there had been a consultation of the cost implications of paying for travel time. This had revealed that additional allowances, including travel time, might add as much as £2 per hour to costs for providers, and the local authority was considering changes to its commissioning practices as a result.  It also highlights how much unpaid time is borne by the domiciliary care worker as a standard, typically non-negotiable part of their job, and suggests that the numbers paid under the minimum wage will be much higher when travel time is taken into account.

To begin to tackle these issues, Local authority contracts with care providers should explicitly state that external providers pay care workers an hourly rate for all working time, including the time required to travel between visits. There should also be transparency in procurement processes and contractors should be required to state what hourly rates comprise in terms of working time and specifically whether travel time is included, and whether there are enhanced rates for short visit lengths. Only then will it begin to address the realities of travel time, visit lengths and unpaid labour that currently characterise work in domiciliary care.