The increase in the minimum wage to £7.20 an hour from the start of next month is a welcome move from the government. The increase of 50p per hour has been heralded as part of the rate escalation process that will help bring the minimum up to living wage level. The rate will be around £9 an hour by 2020.
Campaigners point out, though, that the present
level recommended by the Living Wage Foundation is £8.25 an hour and £9.40 an
hour in London, so the government levels are still someway short of the
prescribed level to ensure people live above the poverty line.
The Conservative Government have rather
captured the language of the living wage campaigners - made up of community
organising groups, faith denominations, trade unions and progressive employers.
The intent on the part of Chancellor George
Osborne is to get more money into the economy in order to keep the wheels of
the market turning. He has realised that continually pushing riches toward the
already rich, results in such individuals storing it away offshore or elsewhere.
What they don’t do, necessarily, is spend it in the economy. People have to buy
things to keep capitalism going. Individual debt levels cannot continually be
pushed up to sustain demand amid a landscape of flat lining pay.
There is also ofcourse the other slight of
hand which is whilst upping minimum wage levels, the Chancellor cuts away at
welfare. The net gains to individuals coming from the “living wage” do not
make up for the cuts being made in benefits.
All this said, it is important for living
wage campaigners to celebrate just how far they have progressed. The position
now is that of a Conservative Government telling employers they must pay
employees a minimum living wage.
Think back to 1997, the beginning of the
Labour government’s time in office, when the minimum wage was first proposed.
The howls of opposition from the Conservative Party and employer organisations
about the damage it would do to business, the loss of jobs etc. None of the
claims proved true, with many of the doubters now converted to advocacy.
The story of the living wage campaign in
the UK is remarkable. It began in 2001 with community organisers London
Citizens. They took soundings amongst their community groups, many being faith
organisations. What came back was the difficulties being caused for community
and family life by poverty wages. Respondents told how they were having to do
two or three low paid jobs in a week just to keep their heads above water.
Sectors like cleaning, catering and security were particular offenders.
London Citizens together with the support
of a number of trade unions began the living wage campaign. Research undertaken
came up with a living wage level of £6.30 an hour on which it was considered
people could live above the poverty line. Employers were then asked to sign up
to pay the rate.
Many encounters then followed. The
community organisers tried polite letters, requesting meetings to put points to
business managers. Some of these requests succeeded, others failed. Failure
resulted in direct actions, such as church parishioners and nuns turning up in
Oxford Street to bank thousands of small coins that had been collected. There
were demos outside.
The institutions did not like this bad
publicity and usually came to the negotiating table. I remember one particular
meeting in a drafty church hall in the east end, with then Chair of HSBC, Sir
John Bond. Sir John was faced with a number of priests, a bishop, trade unionists
and community leaders arguing that the bank should pay its cleaners a living
wage. The meeting did not bring immediate success but further down the line
HSBC became a living wage employer.
Then London Mayor Ken Livingstone took up
the idea, establishing a living wage unit at City Hall. The unit set a living
wage level each year. The living wage was implemented with those parts of
London government that the Mayor controlled. The Mayorality also insisted that
any contractors it dealt with pay their employees the living wage.
The living wage theme was enthusiastically continued by Conservative
Boris Johnson when he became mayor in 2008.
Trade unions came to take on a much more
central role in pushing the living wage concept nationwide. There had been
concerns about regional variations in pay being encouraged by the idea.
Initially, trade union branches had been
members of London Citizens. The community organisation was able via its faith
connections to make contact with workers in insecure environments in Canary
Wharf, where previously the unions had struggled to get a foothold.
Then, as momentum built, the unions came to
the forefront, many like the Communication Workers Union, Unite and Unison becoming
living wage employers themselves.
The campaign has grown and grown, gaining
public and mainstream political support. Employers recognised the value of
paying a living wage, seeing it resulted in less turnover and better morale.
There was also much corporate social responsibility PR value in being
associated with the living wage.
A snapshot of the benefits resulting from
the living wage, can be seen in London, where it was estimated that £182
million had been added to wages of 19,000 employees between 2005 and 2013. On the
down side, it was estimated that 22% of workers (5.28 million) still earned under
the living wage as of 2014 across UK.
Government has increasingly seen the value
of the living wage for the reasons outlined earlier. It also increases the tax
take as more people will be paying more tax.
So at a time when no doubt many of those
campaigners who have fought for the living wage down the years may feel a
little aggrieved to see the government seizing the concept for its own, this
should be viewed as a victory. There are caveats such as the minimum wage level
increases being implemented by the government, still do not bring wage levels
up to the living level as stipulated by campaigners. Also, the cover being provided for benefit cuts. But overall the fact that
a Conservative Government has accepted and now implements the living wage
concept forcing all employers to pay a minimum living wage should not be
underestimated. It is a major achievement for progressive politics and those
across the labour movement and faith communities who have struggled for this
basic right for so long.