Living Wage Campaign

26 April 2013

People's Health Trust is a Living Wage Employer and we are delighted to give our support the campaign

Launched by London Citizens in 2001, the Living Wage has won over £210m for 45,000 low-paid workers and has spread across the entire United Kingdom. It has cross-party support including Boris Johnson, Ed Miliband and Iain Duncan Smith. There are now over 200 accredited Living Wage Employers including several of the FTSE 100.

Recent research shows that

  • Over half of those in Living Wage workplaces (54%) felt more positive about their employment after it was introduced and a similar number (52%) felt more loyal towards their employer.
  •  The introduction of the Living Wage (LW) resulted in staff leaving rates falling by 25%.
  •  Companies paying the LW identified improvements in the stability, attitudes and characteristics of the workers.
  •  Reputational benefits to companies paying the LW were significant, including helping to attract new business/customers and in recruiting staff to professional roles.
  •  Workers in LW workplaces had better psychological well-being than those in non-LW workplaces.
  •  Around one-third (32%) of those in LW workplaces felt it had benefitted their family life, for example enabling them to spend more time with their family and to take more holidays.
  •  Over one-third (38%) of those in LW workplaces reported financial benefits, such as the ability to buy more goods and save more.
  •  Overall, two-thirds (65%) of those in LW workplaces reported an improvement in either their work, family life or finances.

Challenges to be solved

Increasing working poverty

One in five workers in the UK – some 4.82 million people – are paid less than the Living Wage. Working poverty is on the increase in London with 100,000 more people on less than a Living Wage over the past year. Women and migrants are greatly over-represented in this group and working poverty is one symptom of powerlessness and exclusion that also manifests in other areas of life.

Compounding problems in low-paid industries

Large sections of low-paid industries such as cleaning, care and hospitality are characterised by high turnover, part-time work, little or no training, lack of career progression and poor quality service. The spread of outsourcing reduces accountability between employee and beneficiary of service, and also limits career progression. The low-pay and lack of career prospects makes these jobs unattractive to British born workers and contributes to growing problems of youth unemployment. There is no more acute example of this than in social care.

Failures of market and state solutions

The market has created a situation where for millions of workers the cost of living far exceeds their earnings. Even in businesses with huge profits and high rates of executive pay, a substantial proportion of the work-force is in working poverty. The state solution to the problem of working poverty is in-work benefits. Those in working poverty outnumber those out of work and the number of working families who get working tax credits from the state to top up wages is up by 50 per cent since 2003, to 3.3 million. This creates a huge pressure on the welfare bill. Market and state solutions do not seem to be working.

How does the Living Wage solve these challenges?

Winning wages and building accountability

The most direct effect of the Living Wage is to increase the income of people on a low wage: £210m to help lift 45,000 people out of working poverty. But it does more than win money for low-paid people. In the method of change, relationships of responsibility and accountability are developed between customers, employers, workers and their families and communities. It is something that people do rather than just have done to them and in winning a Living Wage, people gain greater civic power to tackle other problems in their lives and communities.

Changing low-paid industries

By articulating a pay rate connected to the cost of living the Living Wage builds a bond between effort and reward that recognizes the dignity of work. This drives positive cycles of pay, staff retention, training and productivity, and so helps enable low-paid industries to up-skill and professionalize. In turn this can change low-paid industries into more attractive places to work for British young people. It also improves the status of low-paid work and so improves perceptions of the often migrant and female workforce.

Builds a powerful civic and consumer voice

The Living Wage came from civil society and is a living, breathing movement that builds the power of people and develops unusual and valuable public relationships. It is not a policy intervention enacted by the state, nor a corporate responsibility agenda led by the market. As industries shift to Living Wage, this re-balances the responsibility for low pay between the Government and the Employer and reduces the working tax credit bill enabling public investment in other public goods. Responsible employers are then recognized as Living Wage Employers enabling differentiation in the market and consumer choice to drive good practice.

How can you get involved?

Go to www.livingwage.org.uk for more information and to become a Living Wage Employer.

(Ref: Living Wage Phase 3 strategy document, courtesy of Citizens UK)


 


KPMG report October 2012. http://tinyurl.com/d24sw3h

Trust for London Poverty Profile 2012. http://tinyurl.com/cnut92q

 

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