Living Wage’s time has come, but where will it go?

An acceptable standard of living rate has been set at �7.65 per hour. Picture: Contributed
An acceptable standard of living rate has been set at �7.65 per hour. Picture: Contributed
Share this article
Have your say

FROM this month on, the cost in wages of a basic but acceptable standard of living has been set at £7.65 per hour, the amount that the Centre for Research in Social Policy (CRSP) says a worker outside London needs to be paid to be able to afford adequate food, shelter, clothing and so forth.

Nationwide recently became the first major high street brand to sign on to this Living Wage, promising that all staff and contracted workers would receive no less than £7.65, or £8.80 if in London. The UK’s biggest building society hailed the campaign as “an idea whose time has come”.

It’s rational to assume that any adult in full-time employment receives a salary that abolishes the risk of poverty, but shamefully this is not the case.

The legal minimum wage for those aged 21 and over currently stands at £6.31. That is due to go up by nearly 3 per cent in October, but the resulting rate of £6.50 still falls well short of the Living Wage.

The significance of this is reflected in a survey for Nationwide released last week. It found that only 9 per cent of more than 1,500 people questioned believed they could maintain a reasonable standard of living on the minimum wage.

What then are the chances for those who don’t even reach that threshold? Research carried out last year suggests that as many as 150,000 social care workers don’t get the minimum wage, news which prompted the government to toughen up penalties for employers who break pay law.

The Living Wage, meanwhile, is a voluntary scheme with little stick to go alongside the carrots, such as the fact that employers who pay fair wages report higher standards of work and lower absentee rates. Roughly one in five employees in the UK earns less than £7.65 and hour, giving Britain the second highest rate of low-paid workers in the OECD group of wealthy countries.

There are efforts afoot to give the UK’s Living Wage more statutory heft. Noting that as many as 400,000 Scots don’t earn the minimum, Labour MSP James Kelly called last week for a law to ensure that public contracts are only awarded to companies that pay at least £7.65.

There are difficulties in both implementing and enforcing such regulations. Glasgow was the first council in Scotland to adopt the Living Wage in March 2009, raising the salaries of its lowest paid workers by more than £1,100. Cordia, the arms-length company that runs frontline council services, also adopted the Glasgow Living Wage.

Women make up of the majority of the cleaners, carers and catering staff who benefit from this, but Cordia is not strictly obliged to adhere to it. The council’s website states that it works within “the current legislative framework” to encourage – not require – its contractors to pay the Living Wage.

Some 130 organisations employing roughly 49,000 people across Glasgow have signed up so far to the Living Wage, but this is a drop in the ocean in a city with an estimated 18,000 firms in business. For an idea whose time has come, few seem to recognise its merit. «