We cannot fix social care by continuing to rely on outmoded economic theory

In Britain, and this is almost certainly an underestimate, one in five adults are unpaid carers for not only the elderly but working age adults too – something we forget in the public conversation about social care. 1.6 million people right now have an unmet care need. Taking the ‘this issue is serious because it affects the economy’ line, Liz Kendall stood opposite the minister of state for health and social care last week in Westminster Hall and put it to the Conservatives that they really should take this issue seriously as “social care is as important a part of our economic infrastructure as the roads and the railways”.

Why? Because how will all those unpaid carers go out to work and keep those jobs if they are trying to care for someone at the same time? Care jobs, like green jobs by the way, are an area of future growth post-pandemic, with 525,000 more care jobs projected in the labour market by 2030. Who, then, will apply and stay in these caring jobs? As it stands, you get the minimum wage to put your life on the line. One in six don’t qualify for statutory sick pay – £95 per week, which most would agree is not enough to self-isolate. One quarter of care workers are on zero-hour contracts. Unsurprisingly, employers have continual problems recruiting and when the positions are filled, it is not for long.

We know that the presence of unions in a sector and collective bargaining would increase how much care workers are paid. But organising in a sector with 18,500 mainly private employers across nearly 40,000 organisations is still extremely low. And that is not even considering the 97% of domiciliary workers working in private companies making more than one million visits per day to vulnerable people in their homes.

Even if care workers with union help were successful in securing better pay and conditions, unless care jobs are publicly provided or subsidised higher costs will translate into employment losses. Why? Because when the cost of a paid carer rises, women (and it is women) find it more economical rational to leave the labour market and do the care for themselves. This, as Robert Sweeney has shown, lowers female employment and with public sector pay linked to what would be earned in the private sector, the pay and conditions of care work continue to deteriorate.

Governments around the world are being advised that they need to stop confusing price with value. Care work is a face-to-face service, to which productivity improvements cannot be applied – the basis for higher incomes. Because care is labour intensive, costs will not fall when more ‘output’ is increased and more people are cared for. As we know, when ‘output per hour’ – a standard measure of productivity – increases by forcing carers to look after more patients in a given period, quality of care goes down. Employers’ ability to pay higher wages is therefore low.

If we continue pretending that the problem of care can be solved by a continued reliance on basic outmoded economic theory, in which wages are set by abstract market forces of supply and demand, we will not be able to reframe priorities by acknowledging that we have underinvested in the caring economy, that wages are low and that wages are not set by abstract market forces but determined by our values, by decisions of the government and influenced by a legacy of racial and gender discrimination.

Joseph Stiglitz, at Open Labour’s conference this weekend, also warned that we need to move past 20th-century government reliance on GDP as a definition of progress. He warned that GDP is not a good measure of well-being or sustainability. Instead, we need a ‘dashboard’ of measures that reflect different dimensions of our society with the GDP measure applied carefully with awareness of its limitations.

At the end of the Westminster Hall debate last week, the minister of state for health and social care concluded. “I will not be drawn into further detail about the system at this point. The questions about funding lie with the Treasury.” They don’t, they lie with all of us. The pandemic has shown a lack of basic understanding of the adult social care sector in England by the public, the government and the media. In the middle of a pandemic, we are struggling to think about the future of our economy – but now is the time to, because if not now, when?

Back to the future: while some powerful vested interests may welcome increased automation of our future economy, where does this leave the majority of us who earn our income through working? Many jobs will continue to go offshore or be automated. Two areas of the economy with the potential to meet our future need and provide a better standard of living are care jobs and green jobs. And neither of these are a priority for the current government. Will we sleepwalk through this 1945 moment? We have to make choices about how we reallocate resources and those are based on what we value – whether we receive care now, don’t receive care but actually need it, care for someone else or one day will need someone to care for us.