A wage to live by

Despite the economic disaster of the recession slowly fading into history, the British public are still feeling the pinch as the aftershocks of the financial crisis have kept people, businesses and the Government on high alert for the next downturn. Even though our economy is growing, faster than any other Western economy at the moment, people are still struggling to afford the ever-increasing cost of living and the staggering reality that thousands in this country, one of the most developed in the world, are relying on food banks to feed themselves and their families is still being played out day by day.

The Government have been questionably absent in their duty to the British people. Their plan to cut the deficit will indeed mean that future Governments have more freedom to spend in future, but the drastic austerity measures that George Osborne has inflicted on our state’s departments have meant that our quality of life has fallen and that even though he has been able to announce regularly that the British economy is back on track it is falling on deaf ears.

Thankfully though, and I’m sure that even the Tories will agree with me to some degree, the private sector is beginning to step up where the Government is turning a blind eye. The Living Wage campaign has been a stellar initiative by which employers can sign up to a set of principles, chiefly that they will pay their employees a wage/salary that is above the minimum wage and will cover their living costs – so that they are not left in the position where work isn’t paying off for them.

The National Minimum Wage here in the UK is currently set at £6.50 per hour, whereas the Living Wage is 20% higher at £7.85 per hour (and in London it increases to £9.15). It is set independently by the campaign’s chief body, the Living Wage Foundation, which monitors the cost of living across the country and determine how much someone should be paid to be able to keep up – not to be well off, but just to keep up.

As I reported in The Gaudie last month, a recent study from KPMG estimated that over 400,000 workers in Scotland are earning less than the Living Wage, which is around 15% of the workforce. Those industries where employees were particularly earning less included catering, retail, care and tourism. With so many being paid less than they need to get by, it is no wonder that the cost of living crisis continues to this day despite the economic boom.

However, over the last few months the Living Wage campaign has snowballed, with many high profile organisations signing up to be accredited as Living Wage employers. The most recent of which is Chelsea Football Club, but they join other national institutions such as Barclays, ITV, RBS, Scottish and Southern Energy and Hearts Football club in doing so. It’s a growing phenomenon where businesses are taking on a moral obligation to their own staff to help them out. It’s great to see. Only around 1,600 employers in the UK, or 70 in Scotland, have signed up though, and while it is an encouraging step and backed by many big names, there is still a long, long way to go before the people’s salaries and the cost of living match up.

With the Government’s current priorities, I don’t expect the Conservatives to be pushing for legislative backing of the Living Wage at any time soon. Labour announced at their Conference in September that they would back a higher minimum wage of £8 per hour to come into force by 2020 should they win the next election, while the Lib Dems have also previously stated that they would back a higher minimum wage. The SNP in Scotland have made the Scottish Parliament a Living Wage employer, and have stated that they would like to introduce a higher minimum wage in Scotland but are currently unable to do so (and the policy has not been recommended for devolution by the Smith Commission).

While the Living Wage is a great thing, it could be better kept as an independent a non-governmental position. The National Minimum Wage provides cover for the general population, and provides them with the assurance that they will be paid for their efforts. Any efforts to increase the minimum wage would be widely welcomed by those struggling to make ends meet. The Living Wage is of course better for the general population than what we have now, but forcing it upon all business is tough, as especially for smaller organisations it can put a large strain on resources that could result in the negative consequences of job cuts or even going out of business. Whilst supporting the Living Wage fully, and perhaps providing financial incentives to doing so, I think that Governments should allow the Living Wage to continue as a voluntary good for the nation and work towards creating an environment where businesses feel able to commit to it.

With the help of the Living Wage, there is a slow-but-sure movement towards redressing the gap between pay and the cost of living that hasn’t recovered in the same way that our economy has since the dark days of the late 00s. The faster people begin to feel that recovery, the faster that self-perpetuating economic growth can kick off again and then, hopefully, the Government can get to improving the lives of its citizens rather than the look of its’ balance sheet.

Leave a Reply

Your e-mail address will not be published. Required fields are marked *