Calls for a living wage

Andrew Lydon writes that, over the last year, probably the most radical proposal made by Labour leader Ed Miliband is about the Living Wage and Living Wage Zones:

minimum not living wage logo“Living wage zones would work for everyone – the people who get decent pay, the employers who get a more committed workforce and the government that saves money on credits.” He said the proposal was a labour market reform that tackled in-work poverty and lifted productivity without boosting the welfare bill.

Refocussing on raising the minimum wage, on the 19th May Miliband launched a report by a previous vice chair of KPMG, Alan Buckle, who looked at the issue through ‘business eyes’. He says action on low pay should be seen as part of a wider strategy to move towards a high skill, high productivity economy and that we should recognise that higher pay will be good for government finances, in terms of the need for fewer tax credits and a lower social security bill.

jrf logoThe Joseph Rowntree Foundation’s Minimum Income Standard project aims to define an ‘adequate’ income. Read more here.

Of the 400 councils In England and Wales 82 are now paying or committed to pay their staff the living wage. All 32 councils in Scotland are living wage employers paying their staff at least the living wage.

As Citizens Advice Scotland’s Chief Executive wrote to the chancellor earlier this year, economists suggest the economic multiplier for income transfers to low income families is higher; they estimate that for every pound GDP increases by £1.60. Families with low income spend the additional money, stimulating the economy by boosting demand and supporting businesses.

living wage logoBut what of private business? Archbishop John Sentamu, who chairs the Living Wage Commission, points out that hundreds of employers – those who are able to do so – have begun to pay a living wage?

In a Huffington Post article, Jehangir S. Pocha, the Delhi-based editor-in-chief of NewsX, said:the one thing that would combat poverty without bankrupting the exchequer – is getting businesses to pay workers a living wage . . .”

Andrew Lydon looks for evidence that the ground is being prepared and we wonder if will ever become the norm. Pocha sees a profound psychological obstacle to achieving a living wage (and, we would add, other reforms):

“This social assumption that “they” are inherently different from ‘us’ and do not have to have access to things like decent housing, clothes, food, leisure, education and health care is etched into the Indian psyche”.

This social assumption is also etched into the psyche of British decision makers and their corporate allies.

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