Councils should be given a £450m funding injection to ensure all care workers are paid the living wage, according to the IPPR think-tank.
Without a rise in real wages the sector could face a staff shortage of 400,000, it warned.
Local authorities should control the additional funds to ensure all care providers they contract with pay workers the living wage, the IPPR suggested.
Councils should also have to work to a minimum commissioning cost to ensure care is not purchased at unrealistically low prices.
While the sector as a whole needs more funding this should be linked to improved pay and conditions, IPPR argued in a paper, Fair Care: A Workforce Strategy for Social Care, published yesterday.
Specifically, it called for a 1p in the pound rise in national insurance contributions to provide the necessary finance.
The think-tank’s analysis found that more than half a million social care workers – nearly half the workforce – were paid below the real living wage (£10.55 an hour in London and £9 an hour elsewhere).
One tenth of all UK workers paid below the living wage are in social care, while 80% of social care workers are female, meaning the sector is a significant contributor to the problem of low pay among women.
Joe Dromey, IPPR senior research fellow, called the treatment of the care workforce a “national scandal”.
"We need to value care workers and we need to invest in social care,” he said.
“Government should use its upcoming green paper to introduce a real living wage for care workers.
“Improving their pay and job quality is essential if we are to tackle the growing workforce crisis and ensure that all those who will need better care as they grow older can be properly looked after.”
Other recommendations included collective sectoral bargaining for social care, mirroring what happens in the NHS.
Care work should also become a regulated profession to ensure high standards and the Care Quality Commission should be given an extended remit to consider employment as well as care quality.
If freedom of movement comes to an end after Brexit, the government should also consider adding social care jobs to its Shortage Occupation List, the IPPR said. This is an official list of occupations where there are not enough resident workers and it allows employers to sponsor individuals to fill vacancies.
Care providers that demonstrate good employment practices should also have additional visa benefits and flexibilities available to them.
