Making the case for a living wage
The living wage is different to the national minimum wage: it pays more, being linked to a higher standard of living for those low-income families that it targets.
I am a passionate supporter of its implementation, not just because of the change it can bring for employees, but also for the benefits it can bring to businesses. But for the campaign to succeed, it needs to go above party politics and have cross-bench agreement.
Whilst Labour and in particular Ed Miliband are great advocates for the living wage, most Conservatives oppose its implementation. Yet unlike his party leader, Boris Johnson has publicly endorsed the living wage, and stated that his aim is to push the number of public and private sector companies paying the living wage in London to 250 by the end of his four-year term. It is unfortunate that we are not likely to see the chancellor support the living wage, considering he has frozen the national minimum wage for those under 21.
13 years on from implementing the minimum wage there is a case to be made for it’s living counterpart, despite the current recession. In London the living wage is currently £8.30 an hour – a figure calculated and set by the GLA. Outside London the living wage is £7.20 an hour.
During the Labour leadership contest I carried out some research into the living wage and spoke to the treasurer of Manchester City Council, Cllr Bernard Priest, who was one of the people tasked with implementing the living wage for staff working within the Council. The council currently pay their staff at least £6.84 an hour, 65p an hour more than the national minimum wage. It is still 36p less than the recommended living wage but is certainly a step in the right direction. The Manchester minimum wage costs the council £85,000 a year, yet the council say it is worth it because it increases staff morale and reduces absence.
A 2009 paper by London Economics found “clear evidence that employers have benefitted across a wide range of areas after implementing the London Living Wage”. They list benefits as including reputation, recruitment and retention of staff.
The benefits of a living wage have a significant impact on employees and their families. It isn’t simply about increasing disposable income; it helps hard working staff who are struggling to pay for essential items and put food on the table. The living wage has already benefitted over 10,000 families across the UK, and has proven to be a great success, which is why large companies such as KPMG and Barclays are staunch advocates. The wage additionally helps to reduces staff turnover as members of staff are not looking for a better paid job; it increases motivation, loyalty and staff morale at the organisation and it is good publicity.
We have all seen the positive results of the national minimum wage, so just imagine how many families could be lifted out of poverty if the breadwinner was paid more. Imagine the number of children who wouldn’t have to go hungry because their parents can’t afford to feed them properly or keep them warm.
Ed Miliband championed the living wage during his leadership campaign; it was one policy that made him stand out from the other candidates, although the campaign was supported by all five. Following his success in the election, he should now be championing the living wage even more and making the case to large businesses across the UK. Not every company is seeing a decrease in sales, and companies such as Primark could easily start paying the wage to their employees.
Urging businesses to sign up to the living wage campaign will be hard work during this time of uncertainty. There are over 2.5 million people unemployed and businesses will claim that they cannot increase staff wages during a recession. Yes, people may well be lucky to have a job that pays at least the minimum wage when times are tough, but there is still an opportunity to make the case for a living wage. Its benefits will far outlast the present period of economic gloom.