The idea that workers should be paid enough to have a basic but acceptable standard of living is nothing new. Campaigners have argued for a ‘living wage’ since the 1870s, with the idea being reinvigorated by community groups, in the 2000s.
The Living Wage Commission, set up under the Chairmanship of the Archbishop of York, was tasked with looking at the case for a living wage in the United Kingdom, assessing whether the timing and conditions are right for a significant extension of coverage, and recommending how this might be achieved.
The headline conclusion of the commission is simple – a million workers in the UK could see their rate of pay increased to the living wage by 2020 with minimal risk of loss of jobs, inflation or cuts in other terms and conditions and a good prospect of gains in terms of workers’ quality of life, savings to the Treasury of £4bn and greater productivity and worker retention. The commission recommends leadership by UK and devolved governments to promote and support the living wage, its implementation in the public sector, and practical steps to encourage private sector employers, large and small and in all sectors, to pay the living wage.
The challenges to achieving that one million target were made clear in a radio phone-in to which I was a contributor. Every conceivable argument against the living wage was aired, from affordability to cost of living to hours of work. Thankfully, the living wage commission’s work is able to counter these claims and offer a few wins of its own to boot – more time for low-paid workers to spend with their families, fewer money worries and better mental health, lower recruitment and training costs, and more. Nevertheless, there is an uphill task to persuade employers, employees and consumers alike that they will not go bust, lose their jobs or see prices rise further.
What is critically important in promoting the message is that the living wage is voluntary. This is both the living wage’s great strength and its great weakness. It means it does not generate employer opposition as they do not have to pay it if they do not want to, but it also means that winning support for a policy with no teeth will be tough.
So if it is voluntary why bother setting a living wage? Well, the main benefit is that it sets a benchmark that is higher than the national minimum wage. It acts as a tangible, quantifiable yet achievable step up from the minimum. It raises expectations, and it’s an indicator of a ‘decent job’ that is easy to understand, for workers and employers alike. Perhaps most powerfully of all it is a beacon of hope in a labour market awash with variable hours contracts, temporary jobs and agency work.
It’s by no means enough, but it’s a start.
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Victoria Winckler is director of the Bevan Foundation, and independent, charitable thinktank funded by membership subscriptions and donations
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Photo: Kyke RW