Thursday, 28 October 2010

The Living Wage

At the recent congress, the TUC and the Fair Pay Network published a report entitled ‘Unfinished Business: The quest for a Living Wage’. The report outlines the experiences of several living wage campaigns, from RMT member cleaners on the Eurostar to a Methodist minister. Local Living wage campaigns have sprung up in many cities including Manchester, Glasgow, London and Norwich. The endorsement of the Living Wage by Ed Miliband caused a storm among some Business leaders. Even David Cameron has described the Living Wage as an idea ‘that’s time has come’. It appears everyone is talking about the Living Wage.

Everyone who is paid minimum wage knows how hard it is to get by. You struggle to cover the rent, shopping, electric and heating bills despite working long hours. Many people in this situation are reliant on in-work benefits. We have seen the re-emergence of the concept of an ‘undeserving poor’ propagated by politicians such as multi-millionaire Culture secretary Jeremy Hunt, who recently argued that poor families should not have children in order to save the state money. However, these myths ignore the fact that the majority of children living in poverty have at least one working parent. Paid work should provide you with everything you need to live a decent life, yet for so many working people this is not happening.

The concept of a Living Wage is the minimum amount of money needed to live a well rounded life. The concept appears to have come from the USA where momentum has been building behind this campaign for several years. The first modern example of a Living Wage campaign began in 1994 when an alliance between trade unionists and religious leaders in Baltimore launched a successful campaign requiring city service contractors to pay a living wage. Subsequently hundreds of campaigns, encouraged by President Obama’s support for a higher minimum wage, are currently ongoing or have resulted in living wage laws being implemented.

The experience of the Living Wage campaign in the USA provides us with some lessons that we can use to improve the campaign in this country. The campaigns were most successful when they incorporated religious and community groups into the movements that could help social justice activists and trade unionist ‘usual suspects’ to mobilise larger numbers of people. While this tactic is something to be repeated in Britain, there were some lessons learnt that we need to steer clear of. In the USA Living Wage laws typically only covered state employees and businesses that receive state assistance or have contracts with the government. The movement is also fractured and often locally based. There is no universally recognised rate of Living Wage and the local Living Wage laws that have been passed have often only been a couple of dollars higher than minimum wage.

In Britain the Living Wage Campaign appears to have the ‘big mo’ behind it at the moment with local campaigns being set up around the country and the endorsement of many senior politicians. The sense of outrage sparked by the bailout of the bankers has meant that many members of the public have got behind movements such as the Living Wage Campaign, the People’s Charter and the initiative for a ‘Robin Hood’ tax on the banks. Despite the grim announcement from the Con-Dem coalition government that working families will suffer an austerity blitzkrieg there is great potential for a progressive alternative that will see a fairer Britain emerge from this crisis.

One Strength of the British campaign is the existence of a unified rate of Living Wage with an agreed methodology of updating it. The Living Wage is currently set at £7.85 an hour in London, £7.15 an hour in Scotland, or £7.60 an hour elsewhere this is based on the ‘Minimum Income Standard’ calculated by Loughborough University's Centre for Research in Social Policy. Researchers asked a broad cross-section of society to discuss and agree what is needed for an adequate standard of living – something that people feel nobody in Britain should fall below. They then worked out how much this costs on average in the UK, based on chain store prices.
For simplicity, the figures used to calculate the hourly Living Wage rate are based an example of a typical couple working full-time, with two children in paid childcare. Whilst not all working-age households include two adults and two kids, £7.60 an hour is enough to protect 90% of working-age households living outside of London.

Another strength of the campaign is that there are arguments for the Living Wage from most viewpoints and positions in society.

Despite the complaints by leading business figures to Ed Miliband’s endorsement of the campaign it has been demonstrated that the living wage is ‘good for business’. Research has shown that paying workers a living wage increases productivity, while reducing absenteeism and the rate of staff turnover. This will decrease the amount of time and money that is needed in order to train new staff. Evidence suggests that socially responsible companies that reward their staff for their hard work are thrive better in the business world than those who do not. Companies such as Barclays and Pricewaterhousecoopers are recognised living wage employers.

For those who are concerned about the amount of money that the state spends on welfare benefits it can be argued that a Living Wage would reduce this spending. The costs paid by the taxpayer, and local community, in relation to the social problems associated with poverty and inequality are staggering. Better paid workers have more to offer for their communities and are not financially dependent upon welfare benefits. Evidence suggests that crime rates would be reduced; acts such as burglary, vandalism and alcohol and drug abuse can be combated by the simple act of paying all workers a Living Wage.

These arguments have persuaded not only business groups such as those mentioned above, but also local government, such as the Greater London Authority, and universities, such as Queen Mary’s, to adopt the Living Wage.

Church Action on Poverty (CAP) has been concerned that some churches have been paying their workers inadequately. The experience of the Living Wage campaign in the USA saw religious groups of all faiths leading the fight for a Living Wage. CAP therefore has been helping Churches lead the way in Britain by signing them up to the Living Wage. It is easy to justify this by highlighting the clear Christian values and moral responsibilities of the Church to treat their staff with respect.

"Those who oppress the poor insult their Maker, but those who are kind to the needy honour God." (Proverbs 14:31)

The current National Minimum Wage is completely inadequate for working families to live off. Despite the 13 pence "pay rise" on the 1st of October, the current rate is just £5.93. While the minimum wage was arguably one of Labour's best achievements, the sluggish increases have been below the amount necessary for a decent standard of living. Furthermore, stratification by age has merely encouraged employers to pay younger workers less. The new rate for 16 and 17-year-old workers will scale the heights of £3.64 an hour and apprentices will be rewarded with just £2.50 an hour.
It is disgraceful that many workers in a nation as rich as ours cannot provide a decent standard of living for themselves and their families because of low wages. The Living Wage is desperately needed. We need to challenge the faux progressivism of the coalition government and step up to fight a generation defining campaign, the campaign for a Living Wage.

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