What do Goldman Sachs, Barclays and the TUC have in common? They all pay the Living Wage. They are willing to pay £8.80 per hour inside London and £7.65 to employees in the rest of the United Kingdom.

This summer the figure of $15 per hour has taken grip in America’s low pay debate, with Seattle pioneering the $15 per hour minimum wage. So can we hit the £10 level over this side of the pond? And can Labour set £10 an hour as a statutory minimum rather than an aspirational Living Wage?

Here are five reasons Labour should argue for a significant step up in our minimum wage:

1. Many in the City and beyond pay nearly £9 per hour

We know that the Living Wage campaign has gained widespread support from the corporate sector. Big names such as Nestle, PWC and private equity firm 3i are signed up to it – the financial services sector is well represented in particular.

It is likely that the London Living Wage will tip £9 when reviewed this November so a jump to £10 in the capital would not be a great leap for Living Wage employers. Whether it can by swallowed in one go or spread over two years, the statement of ambition by a Labour administration would be both potent and realistic. It would also be realistic to phase in £10 in the rest of the country within the lifetime of the parliament, if not sooner.

2. Hiking the minimum wage is gaining momentum in the US

Despite America’s minimum hourly wage being just $7.25, Seattle city authorities set the $15 minimum wage in June. Since then Los Angeles mayor, Eric Garcetti, is said to be in favour of shifting to $13.25 an hour and Chicago’s mayor, Rahm Emmanuel, has proposed plans for $13. Momentum – especially from US economic policy – is a powerful force.

3. We can make it small business-friendly

The most frequent argument against a higher minimum wage is that small businesses suffer the most – and it is this group that Labour must appeal to. But the Seattle plan allows businesses with fewer than 500 employees nationally three years to phase in the increase and very small businesses have seven years.

Most small business in the US recognise the need for better wages. A poll of small businesses (less than 100 employees) in the US earlier this summer found that 61 per cent wanted to see the minimum wage rise to over $10 – not quite $15, but a sizeable increase from $7.25.

4. If employers do not pay, the taxpayer does

What’s more, a failure to increase the minimum wage is adding pressure to the welfare bill. According to the Living Wage foundation, the current London living wage if you take away access to benefits is actually £11.30 an hour. The minimum wage is just £6.31. So employers paying the minimum wage in London provide their staff with only 56 per cent of the income they really need without welfare support like housing benefit.

Chris Leslie addressed this issue in his interview with Progress earlier this month. He pointed out that tackling the welfare budget is about, ‘being tough on the causes of welfare inflation … not just unemployment and benefits but also housing costs, in particular private sector housing benefit, and low pay and employment security and the nature of employment today.’

http://archive.progressonline.org.uk/2014/09/01/im-jarring-with-my-colleagues/

5. Even a plutocrat is on board

Finally – I was drawn to a captivating TED talk by Nick Hanauer, who describes himself as a plutocrat and an unabashed capitalist. He makes a compelling case for the $15 wage from the perspective of someone who would be paying it. http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming

Many will oppose a £10 minimum wage because there are easy and superficial arguments against it. A meaningful rise in the minimum wage is really about conquering fear, and having the courage to enact a policy that will bring long-term prosperity to our nation.

Moreover politically it gives Ed Miliband the opportunity to take the lead on tackling low pay and to propose a centerpiece policy to go with cost-of-living crisis narrative. It also gives something tangible for those of us on the doorstep to offer the electorate.

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Jeremy Adams is a committee member of Labour in the City and a communications adviser to both large and small companies

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Photo: T Stadler