13 July 2023

Well-being at work is key to growing the economy

Unemployment remains low, but we need to focus on quality, not just quantity, of jobs.

The rise of the gig economy has brought an end to stable, well-paid work for many. Photo by Ian Forsyth / Getty Images

Work is a paradox. Unemployment has a significant and detrimental impact on the mental well-being of millions of Brits, but being in work is making us ill too, according to new polling commissioned by Workwhile from Opinium.

Over half of respondents – 57 per cent – told us that their mental health was suffering as a result of the demands of their jobs. Despite the immense pressure of the cost-of-living crisis, half of those surveyed said their work-life balance was more important to them than how much they earned. Pay was the most important feature of work to only 12 per cent of respondents to the poll, carried out on 14-16 June.

And yet, only 13 per cent of people thought that there was more good quality work in their local area than when they started working. The rise of the gig economy and zero-hours contracts signals a crisis in the quality of work, with real impacts not just for individuals but for businesses and the economy too.

Pressure to improve the quality of work has roots as far back as the Industrial Revolution, with the Factory Act 1833 regulating working conditions for children for the first time. In the 20th century, new legislation gave us weekends and paid holiday, a cap on maximum hours, and the minimum wage. The introduction of compulsory gender pay gap reporting has marked a more recent shift towards addressing discrimination and inequalities.

But the modern world of work is changing rapidly. About 3 per cent of working people in Britain are on zero-hours contracts, with no guaranteed, consistent working hours, and often with low hourly rates of pay. Employer investment in skills and training has been declining for decades, while automation and AI pose new challenges. Evidence shows that collective bargaining and widespread union membership helps to improve working conditions, but unionisation has fallen to only a little over a fifth of workers. And while board-level employee representation is common in Europe, and underpinned by legislation in most cases, it’s absent in the UK.

Since the Covid-19 pandemic the UK has been facing a new kind of labour market crisis. While unemployment is at its lowest rate since the 1970s, economic inactivity is at a seven-year high – and though there are some positives, the UK is the only G7 nation where the expected recovery to pre-pandemic levels simply hasn’t materialised. According to the Office for National Statistics, there are over 2.5 million Brits unable to work due to ill health. And while the long-term impacts of Covid-19 play a role, worsening mental health is a major factor.

At an individual level, that’s disrupting lives. That’s clearly bleak for the individuals concerned. But it’s also disrupting businesses and the economy. The “everyday economy” – employers in social care and early years, construction and hospitality – are struggling to recruit the people they need. We see this every day in our own work supporting employers to create apprenticeships. It has a wider impact on the care available for our youngest and oldest family members, and on creating thriving places we can live and work.

Ultimately, a shortage of labour and skills is putting businesses, especially smaller ones, at risk. And fewer people working, combined with significant pressure on businesses, isn’t going to grow the economy in the way the government has envisaged.

Yet if poor quality work drives worsening health and well-being and falling labour market participation, then we have an opportunity – because the opposite is also true. We know that good work is good for individuals, communities and the economy. By working with employers to create good quality work, and ensuring everyone can access it, we can create a virtuous circle.