Young social care workers previously paid below the new national living wage (NLW) have seen a pay rise since its implementation, according to a think-tank.
The report, Rising to the challenge, found that many social care employers included workers under the age of 24 in the new pay rate for over-24s.
The think-tank, Resolution Foundation, found that of 80,000 workers surveyed, 83% of young workers who where previously paid below the national living wage are now paid £7.20 or more.
The new national living wage was introduced in April, raising the pay floor by 50p for workers aged 25 and over.
When the change was first announced, social care employers warned that they would have to cut working hours in order to accommodate the new rate.
However, the report found no evidence to suggest this has taken place, with the average hours for social care workers previously paid before the living wage increasing in 1% since April.
Laura Gardiner, senior research and policy analyst at the Resolution Foundation, said: “It is encouraging that younger workers have also benefited from the new 25-and-over rate, despite having no legal entitlement to the National Living Wage.
“In fact, across the age range social care employers are clearly doing much more than the bare minimum where pay is concerned, with the average pay rise double what it would have been had bosses just increased pay to the legal wage floor.
“As the NLW continues to rise to its target value by 2020 we risk reaching a ‘crunch point’ where a lack of funding leaves the care sector unable to continue to spread the benefits of the NLW.
“Our ageing population combined with the prospects of reduced inward migration post-Brexit make it essential that more public funding is available for care providers to attract and retain the care workforce we need.”
The report also detailed wider ‘knock-on’ benefits of the wage in the social care sector beyond the lowest paid.
Looking at pay improvements during April-July 2016 across the workforce, providers invested more than twice as much in raising pay than if they had only satisfied the national living wage requirements and nothing more.
Though some of this will be due to normal pay uprating, this signals the ‘spillover’ effects from the NLW that the Resolution Foundation and the Office for Budget Responsibility predicted.
However the report warns that, with the extra cost of the new wage in social care set to reach £2.3 billion by 2020, the ability of the sector to continue to spread the benefits in the way it has so far will be limited.
The Foundation says that the solution should not be to row back on the policy, but instead to ensure that there are sufficient funds for providers to continue to implement the NLW without adverse consequences for workers.