What can local voluntary and community sector organisations do to encourage the Living Wage?

By Daniel Silver, co-director of the Social Action & Research Foundation

The Living Wage is fast becoming a key campaign of our age. And no wonder. The injustice of low-pay is increasing throughout the UK. As Joseph Rowntree Foundation’s research on minimum income standards has shown, the past five years have seen an unprecedented erosion of living standards in the UK. Median household incomes reached a peak in 2009, with earnings continuing to fall relative to prices at least until late 2013.

As my co-director Amina Lone and I have written previously, there is irrefutable evidence of the high representation of ethnic minorities and women in low-paid work. For example - Around two-fifths of people from ethnic minorities live in low-income households, which is twice the rate for white people and almost half of all Bangladeshi and Pakistani workers in the UK earn less than £7 an hour.
The North West Policy Forum, which brings together race equality campaigners, has recently identified low-pay as a major issue to address. The Living Wage provides a key mechanism through which to achieve this (although of course it is no magic solution in itself).
There are several arguments that are given against implementing the Living Wage. This briefing by Stephen Crossley for the North East Child Poverty Commission provides some ideas for local organisations to be able to make an effective case for the Living Wage:
  • In this difficult financial climate, councils may argue that they simply can’t afford to implement the Living Wage. However, a wage rise for the lowest paid employees should not be unaffordable for any employer. Small increases at the lower end of the wage bill can be offset elsewhere, through reduced ‘pay ratios’ (the difference between the highest and lowest earners) and by reduced costs in other parts of the organisations, such as (re)training and recruitment.
  • A number of local authorities have implemented the Living Wage by paying a ‘discretionary supplement’ to staff on wages below the level of the Living Wage in existing pay structures. This approach means job evaluations do not have to be revisited or amended, which can overcome concerns to do with HR.
  • In terms of procurement, there are examples where promising work is being done. For example, Lewisham Council ask for two tenders to be submitted: one tender with the contractor paying a Living Wage and one without this requirement. A decision is then made internally and with the Social Value Act, there is a clear case to be made.
So, with this knowledge, what can local voluntary and community sector organisations do?
Firstly, they should become Living Wage employers themselves; the Living Wage Foundation provides a valuable national resource offering advice and support on how to implement the Living Wage.
Influencing local authorities is a major step and there are many examples of good practice that can be drawn upon for ideas, motivation and supporting evidence. Preston City Council was the first Living Wage employer in the north, paying a Living Wage to all employed staff and all staff contracted as agency staff, while the council are looking into secure the payment of a Living Wage in their procurement processes. Salford City Council has also introduced the Living Wage, a move that will benefit 1,200 council employees; following this decision, seven other major local employers announced that they too were also becoming Living Wage employers. Both councils face significant financial challenges due to austerity, yet they have managed to implement the Living Wage. If they can do it, the question must be: why can’t others?
There are also local grass-roots campaigns that are aiming to make a difference, such as the Greater Manchester Living Wage Campaign. This aims to make the city-region a Living Wage Zone by challenging low pay, and putting Living Wage policy and a culture of social equality at the heart of how Greater Manchester works. One of the actions they have already taken is to lobby Manchester’s two football clubs to pay fair wages to all employees.
The Living Wage provides a powerful message: that everyone deserves to be paid a wage that can ensure a decent standard of living. It is a message of social justice. It is also a core message for race equality. Through supporting all people on low-pay, many ethnic minority communities who experience some of the worst effects of discrimination will benefit and the Living Wage campaign will become stronger with increased knowledge of the complex dimensions of poverty that are often neglected in mainstream debates.