We’ve been a member of the Living Wage Foundation since it was set up in 2011. It’s a vibrant and compelling idea that transcends the business and political spectrum – David Cameron, Ed Milliband, Boris Johnson and business leaders across the UK have promoted and endorsed the aims of the foundation.
Paying a Living Wage is not only ethically right, it also makes sense for our customers. We combine the Living Wage with employee co-ownership and fixed working hours – no zero-hours contracts here! All this means we can recruit and retain highly motivated workers who get the job done – the people who make and test your lighting, print your cards and posters, pick and pack your orders, and provide you with excellent customer service.
We recently interviewed Rhys Moore, the Director of The Living Wage Foundation. Since the Foundation was launched as a national initiative in 2011 it has improved the lives of low paid workers every year to the tune of £200 million and reduced government spending on ‘in work’ benefits.
Rhys, thank you for taking the time to be interviewed. Can you tell us what the Living Wage Foundation is?
The Living Wage Foundation is a UK-wide organisation that promotes the Living Wage as a positive choice for responsible employers. The Foundation offers advice and support on implementing the Living Wage and advocates for higher wages for low paid workers.
So what’s the difference between the National Minimum Wage and the Living Wage?
The Living Wage is a voluntary hourly rate of pay, higher than the national minimum wage, set independently and updated annually, calculated according to the basic cost of living in the UK. It is enough to ensure that working people and their families can afford a decent standard of living. The Living Wage is currently (from November 2013) £7.65 in the UK, and £8.80 in London.
How is the Living Wage calculated?
The Living Wage is partly based on the cost of a basket of essential goods and services. The calculation is also based on research by the Centre for Research in Social Policy at Loughborough University. The research looks in detail at what households need in order to have a minimum acceptable standard of living. Decisions about what to include in this standard are made by groups comprising members of the public. The Living Wage is therefore rooted in social consensus about what people need to make ends meet. More information about how the Living Wage is calculated can be found here.
What are the economic benefits to paying the Living Wage?
An independent study examining the business benefits of implementing a Living Wage policy in London found that 80% of employers had seen a noticeable difference to the quality of their staff’s work and 75% of employees reported increases in work quality as a result of receiving the Living Wage. The same research found that those working in a Living Wage workplaces have better psychological wellbeing. Poverty is complex in today’s society. In order to make lives better for those living in need, a range of structured solutions across policy areas are needed, the Living Wage can contribute to this structure.
Living Wage accredited employers seem to be weighted towards the public and voluntary sectors. Why is this?
This is a misapprehension – there are actually more Living Wage employers in the private sector.
There are some striking absences from the list of accredited Living Wage employers. None of the supermarket chains, major high street retailers, or major online businesses are members. Why do you think this is?
These industries are ones where low pay is particularly prominent but we are looking forward to engaging with employers from these industries in future. The leadership of accredited employers like Urban Cottage Industries, communicating the importance of responsible pay, makes all the difference. There are now 630 accredited Living Wage Employers and the increased presence of the Living Wage on the high street is starting to be felt.
Should the law be changed to make paying the Living Wage compulsory?
We don’t think that the Living Wage should be made compulsory, but should remain a voluntary standard, rooted in civil society, for employers that want to go above and beyond. We support a strong National Minimum Wage which provides a simple, well enforced statutory floor. Alongside the National Minimum Wage the Living Wage provides a more ambitious standard for employers who can and want to do better than the legal minimum. As such the Living Wage should remain a voluntary and non-statutory standard that is calculated independently of Government.
The Living Wage campaign enjoys cross-party support. Why is it not compulsory for all public sector employers to pay the Living Wage?
Despite lifting the wages of tens of thousands of people there is still a long way to go. Over 5 million workers earn less than the Living Wage. Following comprehensive discussions with our partner organisations and member communities, we make the following recommendations to our government –
- They implement the Living Wage in the civil service.
- They encourage and enable implementation of the Living Wage across the rest of the public sector.
- They take advantage of the full range of policy instruments to encourage employers to adopt the Living Wage.
What do you hope the campaign will achieve in future?
We look forward to working with thousands more employers to spread the Living Wage as the norm. Employers like Urban Cottage Industries are leading the way. There remains a huge amount to do to combat low pay. Research conducted in 2013 by one of the Foundation’s Principal Partners, KPMG, found that approximately one in five workers in the UK earns less than the Living Wage, with women, migrants, part-time workers and young people all disproportionately represented in this group. ‘The number of households in in-work poverty now outstrips the number of workless households in poverty for the first time’ (Joseph Rowntree Foundation, 2012).
Thanks for being interviewed Rhys. Everyone at Urban Cottage Industries wishes the Foundation success for the future, particularly in improving the pay of workers in the retail and online sectors.