The value of the Living Wage

living wage logoEveryone has a ‘week’ these days, and every week seems to have been claimed by someone or something. This week is no exception – it’s Living Wage Week. It’s probably lots of other weeks too, but this is the one I’m going for! Monday saw the announcement of the new living wage hourly rate – £8.25 (£9.40 in London), a 40p an hour increase on last year. Based on a working week of 37.5 hours, a living wage should provide enough to have a minimum acceptable standard of living.

I’m so keen on promoting the Living Wage because it tells a different story to the clamour in the popular press suggesting that cause of all our woes is people being dependent on the state and getting something for nothing. Talking about the living wage counteracts this.

Let’s start with the name, living wage. To talk about a living wage makes the case that someone’s wages should be enough to live on. We ask people what they do for a living, yet we seem to have forgotten that working full-time should mean we earn enough to pay the bills. And one huge reminder that this isn’t the case, as the government loves to tell us, is the rising tax credit bill. Please always remember that only the tiniest part of the welfare budget goes on out-of-work benefits. Most of it actually goes on pensions, and the next biggest part is paid to people in work in the form of housing benefit and tax credits. There are two ways to cut the tax credit bill – the devastating but easy route currently going through parliament whereby payments are simply cut. Or the route which actually takes care of people, whereby wages are increased and people qualify for lower or no payments because they don’t need them.

Reminding ourselves that work should pay and the worker is worthy of his or her wages (Luke 10:7) should restore our respect for workers. We hear the treasury talk a lot about ‘wealth creators’ and how we should nurture them. But I don’t mean rich business executives who hid their money in off-shore bank accounts, creating wealth only for themselves. The real wealth creators are the workers in industry and business, as no-one can make money if there is no-one to do the work. Even workers in public service contribute to wealth creation as they build the stable society in which business flourishes. Over the last 30 years there has been a steady transfer of wealth away from workers’ wages and into the hands of shareholders. The Living Wage is a small way to rebalance this and make sure that work and workers are valued.

One of the best things about the Living Wage for me is how it is calculated. The rate is set annually by an independent research body at Loughborough University. The level is not set by Labour or Conservative, but the Living Wage does enjoy cross-party support. The rate is calculated to enable people to have an acceptable standard of living. What do you need to be able to afford to provide for your family and belong to society? The answer to this question determines the rate, and the answer is not given by politicians or university academics. The research asks members of the public, who decide what is an acceptable standard of living. In an age of suspicion generated by the Tory narrative setting up false divisions between so-called ‘workers and shirkers’, this means the Living Wage is rooted in social consensus. This is what ordinary people think other ordinary people need to live, no-one is taking advantage of anyone else.

Finally, I think it needs to be said that the Living Wage is not the same as the so-called ‘national living wage’ announced by George Osborne in the summer budget. The government rate, which comes into force in April 2016, is based on the labour market and what other people earn, and does not bear any relation to what is actually needed to live in society. It is set at £7.20 an hour, so is lower than the Living Wage, it does not apply to under 25s, unlike the Living Wage, and it is compulsory. It is, in effect, just a raising of the minimum wage, but only for over 25s. The Living Wage is voluntary, aspirational wage, a measure of best practice for employers. Employers can be credited as Living Wage employers when measures are put in place to pay all staff (included contracted out staff) the Living Wage rate.

The Living Wage Foundation says that the Living Wage is good for business, good for families and good for society. On top of this, I believe the whole concept is good for us. It says that people are the most important part of how we build society, that the work people do is valuable and those who do it are shown value accordingly. It is decided on by the people for the people, it is a truer representation that we are all in it together than anything we’ve seen from the Tories. Join the movement here!


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