Living Wage Week: the bottom line doesn’t have to mean the breadline

Living WageAs the government continues to resist calls for fair pay from thousands of struggling British public sector workers, Living Wage Week (3 – 9 November) is an opportunity to celebrate the employers seeing the business sense in paying their staff a decent wage and encourage others to follow their lead. 

£9.15 an hour in London; £7.85 across the rest of the UK. Figures released today by the Living Wage Foundation today set the new benchmark for employers formally committed to paying their staff enough to cover the cost of living in Britain today. The rates, calculated by the Centre for Research in Social Policy from a comprehensive range of living expenses, will be adopted over the coming months by over 900 Living Wage Employers. A renewed focus on the Living Wage debate cannot come soon enough. Unemployment may be falling, but in-work poverty is on the march. Just last week, research published by the Resolution Foundation revealed the true impact of austerity: more than five million people working casual, insecure, minimum-wage jobs that simply don’t pay enough to live on; ever-decreasing opportunities for the same people to progress in work; and the low tax revenue this leaves the government storing up further trouble for the future.

"Being low paid, and getting stuck there for years on end, creates not only immediate financial pressures, but can permanently affect people's career prospects,” says Resolution Foundation Chief Economist Matthew Whittaker. "A growing rump of low-paid jobs also presents a financial headache for the government because it fails to boost the tax take and raises the benefits bill for working people."

True, the National Minimum Wage got its first real-terms increase in six years in October, but it’s still far short of the Living Wage families and individuals need to get by (you can compare the rates here). The Living Wage campaign was launched in 2001 by parents in East London, who were frustrated that working two minimum wage jobs left no time for family life, and has served as a rallying cry for decent pay above the national minimum ever since. Much of the idea’s power lies in its simplicity: the view that people working full-time should be paid enough to afford a minimum acceptable standard of living. What reasonable person wouldn’t agree with this? The experience of certified Living Wage Employers have been positive, with excellent results for staff retention, morale and productivity:

  • Over 80% of employers paying (and 75% of employees receiving) the Living Wage said the quality of work had improved in their workplace;
  • Absenteeism from work has fallen around 25%; and
  • Two-thirds of employers report significant impact in staff recruitment and retention.

The Living Wage can also do employers’ brand and reputation a great deal of good too. A survey by Nationwide ( a Living Wage Employer) found 85% of people think companies should voluntarily pay their employees the Living Wage if they are able to; and 54% would be more likely to use the goods and services of a Living Wage employer. This benefit to corporate reputation is not lost on Mike Kelly, Head of Living Wage at KPMG:

“For us, paying the Living Wage is simply good sense. I look forward to the day when the Living Wage brand is as widely known as the Fairtrade brand – and just as widely respected.”

The Living Wage campaign has truly captured the imagination of workers and employers alike – in the last 12 months alone, the number of accredited Living Wage Employers has mushroomed from 400 to 900. With vision and ambition on both sides, and in spite of the current economic climate, it is fast becoming an important part of the solution to the problem of low pay.