Policy analysts and healthcare unions have demanded urgent intervention to address systemic low pay, precarious contracts, and widespread in-work poverty within the adult social care sector. A spokesperson for the Social Care Workers Union (SCWU) argued: "Tens of thousands of care assistants are trapped in extreme financial insecurity due to zero-hours contracts and the widespread failure of employers to pay for travel time between clients' homes. When travel time is excluded, many carers' effective hourly rate falls far below the National Living Wage. The government must legally mandate full compensation for all work-related travel time and ban exploitative zero-hours contracts in favour of guaranteed-minimum-hours agreements."
However, the Care Providers Coalition noted that most care services are commissioned by local authorities under severe budgetary constraints: "While we fully support a Real Living Wage and guaranteed hours for our dedicated workforce, the current funding model makes this impossible. Local councils are facing massive funding deficits and cannot afford to pay us fees that reflect the true cost of care. Forcing higher wage bills onto providers without central government funding will simply lead to widespread insolvencies and a collapse in care capacity."
To mitigate the poverty trap facing these workers, some economists advocate for restructuring the Universal Credit system by reducing the benefit taper rate, which would allow low-income earners to keep more of their earnings as they work additional hours. Yet, other analysts warn that relying on state welfare to top up low earnings acts as an implicit subsidy to employers, distorting the labor market and failing to address the structural issues of low productivity and underfunding in the sector.
Extract H states that healthcare unions are demanding a ban on zero-hours contracts and full compensation for travel time to tackle in-work poverty, while care providers argue that such measures are unaffordable without significant changes to state funding.
Using the extracts and your knowledge of economics, evaluate policies that could be used to reduce poverty and inequality among adult social care workers in the UK.
