UK government 'should back Living Wage'

The UK government should make it an explicit goal  to increase the take-up of the voluntary Living Wage to benefit at least 1 million more employees by 2020, according to a report out today.

The UK government should make it an explicit goal  to increase the take-up of the voluntary Living Wage to benefit at least 1 million more employees by 2020, according to a report out today.

The Living Wage Commission report says the evidence suggests that there is scope to increase the spread of the Living Wage to cover over 1 million more workers within the next Parliament "with no adverse effects, compulsion or regulation". 

It calls on the UK and devolved governments should ensure that all directly employed public sector employees are paid a Living Wage and that they procure on value rather than spreadsheet cost. It stops short of saying that procurement should be linked to contractors paying a living wage to their staff as it says this could disproportionately affect the chances of small and medium sized businesses from winning contracts. 

The Living Wage is an hourly rate of income calculated according to a basic cost of living in the UK and defined as the minimum amount of money needed to enjoy a basic, but socially acceptable standard of living. In 2014 the UK Living Wage rate stands at £7.65 per hour, and the London Living Wage is set at a higher rate of £8.80 per hour to take account of the comparatively higher cost of living in the capital. Statistics show 
that 61% of businesses pay a Living Wage to all directly employed staff. However, there remain 5.2 million people paid below a Living Wage in the UK, says the Commission.

Its report also recommends that central and local government should champion the Living Wage to raise awareness about the campaign.

It says the Living Wage Foundation should oversee the production of a toolkit for businesses to measure both the costs and benefits of increasing wages for the lowest paid workers. It states: "The evidence suggests that there are a variety of business benefits from implementing a Living Wage policy, including productivity increases, lower staff turnover, reduced absenteeism, increased stability of the workforce, improved morale, and reputational benefits. Helping businesses to quantify the potential benefits of the Living Wage would be a huge step forward in getting many to consider implementing it."

The Commission says accredited employers should also do their bit to raise awareness by displaying the Living Wage kitemark in their publicity material. It calls on the Living Wage Foundation to oversee the development of an online tool to allow consumers to identify which goods and services are from Living Wage providers. And it says all publicly listed companies should publish the number of people paid below a Living Wage in their organisation, and the UK government should legislate if they fail to do so.

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