Are ‘Essential Workers’ actually treated as being essential?

As the virus took hold of the UK, sector after sector was shut down with employees asked to work at home where possible. There were a number of sectors however, which were identified as key for the country to continue on life support. 

These sectors include:

• Public safety (e.g. police, fire)
• Health and social care 
• Food and other necessary goods 
• Transport
• Local & National Government
• Key public services (e.g. postal services)
• Utility workers (e.g. gas, electricity etc.)
• Education & childcare

After being in lockdown for the past seven or so weeks, it has become apparent how much we rely on the services supplied by these sectors. Although labelled as ‘key’, many of the workers from the above sectors earn less than the median national income of ￡30K. 

These courageous people are putting themselves at significant risk providing us with essential services — receiving poor remuneration and reward in return. The Government labels them as ‘Essential Workers’ — however based on the current situation they should be relabelled as ‘Expendable Workers’. 

The Government is happy to credit them for their hard work. We are happy to clap them each Thursday night for their bravery. However the fact of the matter is, these people are being grossly underpaid in these unprecedented times.

I would like to highlight three sectors which have been close to the front line — Healthcare, Retail (Amazon) and Supermarkets.

Healthcare

As of 28th April, over 100 NHS workers have died as a consequence of helping people with Coronavirus. 

Of all of the sectors mentioned above, healthcare is unique. For the most part, I believe that people who work in healthcare are wired slightly differently to the rest of us. They put the sick and unwell first — and are less worried about the risk and consequences of a situation. 

That said, many of the staff who have been helping man our hospitals and care facilities are grossly underpaid. An entry level nurse, upon qualification, receives a Band 5 salary in the UK. At the lower end, this amounts to ￡11.31 an hour — the minimum wage in the UK is ￡8.72. Looking across nurses as a whole, the median is slightly above the UK average of ￡30K. 

Care workers, who are twice as likely to die vs. the general working-age population, receive a much lower reward for their efforts. With less access to PPE which is available to doctors and nurses, these key workers earn a median salary of c. ￡16K. 

Predictably, doctors receive a wage which is higher than the median — but the question remains. Are we paying our healthcare staff the remuneration they deserve? With more than half of frontline healthcare workers receiving less than the living wage, the Government will be asked important questions in the aftermath of the virus. And based on our reliance on the system, I am sure any reforms will be welcomed by all. 

Retail (Amazon) 

In these unprecedented times, e-commerce has been the saving grace for many retail businesses. One business in particular, Amazon, has reaped the benefits — due to people opting to order online as physical stores are currently closed.

Amazon’s stock was originally hit hard — falling from a high of $2,170 (19th Feb) to a recent low of $1,676 (12th March). That blip didn’t last long — the stock has rebounded quickly and now trades at around $2,400 per share, with a market cap of over $1.2T. 

At the end of April, Amazon announced its first quarterly results — $75.4B in sales generated between January-March 2020. These results were a 26% increase YoY, and equates to roughly $33M in sales per hour. Astronomical figures. 

You would assume due to Amazon’s position at the helm of retail and their related revenue figures, that their factory staff would be fairly rewarded. Deemed as essential workers, Amazon’s key workers have helped facilitate the aforementioned growth — ensuring that packages are delivered across the UK on time. 

Before the virus, these workers were paid just above minimum wage — ￡9.50 an hour outside of London & ￡10.50 an hour within London. Amazon has pledged to top these wages up by ￡2 an hour with the arrival of the virus, but is it still enough? 

Amazon is actually investing a large % of their Q1 profits ($4B) into additional PPE gear and warehouse cleaning to ensure their staff remain safe — but perhaps they should be digging deeper. Amazon can survive short term losses — paying their staff more than the ￡2 increase over the course of the lockdown period would go a long way in showing that they value their staff. 

And then there is the argument on what happens after the lockdown period? Do the hourly wages revert back to the previous rate? Or has this period illustrated to Amazon that these workers are integral to their long term growth — and will they decide to keep the new increased rates in place for the long term. Hopefully they do the right thing — only time will tell. 

Supermarkets

When it was becoming clear that we would be asked to go into lockdown, people began to stockpile. Families hoarded long-life goods such as pasta, rice and tinned tomatoes. There were also some odd trends — toilet paper aisles were ransacked, something I still do not understand. 

Ironically, supermarkets were deemed essential by the Government and have remained open throughout the lockdown period. The way we shop at supermarkets has changed — limited to a set number of people in the shop at a given time, with the rest of us asked to queue 2 metres apart outside. 

Many of us previously looked at supermarket roles as not being a ‘real job’ — one which you have at university, or whilst you are looking for other work later in life. Covid-19 has shown many of us how much we rely on the brave people who ensure we receive our weekly shop on time. It has shown us it is not just a throw away position, that it is integral to our way of living — ensuring our families are fed and basic necessities are made available.

Not surprisingly, supermarket staff receive the lowest reward for their work — the average hourly wage for UK sales and customer services workers is ￡9.77. Many of the supermarkets have offered to pay staff bonuses due to the Pandemic — M&S have promised 15%; Aldi, Sainsbury’s and Tesco have pledged 10% bonuses.

These pay increases are nice, but a 10% bonus on an hourly wage of ￡9.77 equates to just 97p. Is this enough to justify essential workers putting themselves at an increased risk on a daily basis? One could argue that this is where wages should be without a Global Pandemic in place (above ￡10.75 — the UK Real Living Wage).

Supermarkets have taken measures to protect their staff — protective partitions have been installed and limited PPE equipment has been distributed. However the fact remains — staff remuneration and bonuses need to be reviewed across the board. What this increase % looks like is still TBD — but it must be above the trivial 10-15% currently being offered by the main supermarkets in the UK.

Conclusion

When the dust settles, businesses who employ essential workers should and will be challenged on their current remuneration structures. For some sectors this will be more challenging — for healthcare which is largely Government funded, implementing reforms may be more onerous. More flexibility exists for corporate businesses, such as Amazon and the supermarkets, in providing workers with the pay they deserve — even if it comes at a short term loss for shareholders. And this is not simply isolated to healthcare, Amazon and supermarket workers — this relates to all of the people who work in sectors deemed essential by the Government.

This discussion is inevitable — I hope for the workers who are putting themselves at an increased risk for us will be duly rewarded for their work in the future. 

Fingers crossed.