Living Wage Policy Article

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At this year’s national Labour Party Conference, Ed Miliband announced that a Labour government elected in 2015 would both increase the minimum wage and strengthen its enforcement.[1] This is a policy that we at Sheffield Labour Students firmly support and one that places the party firmly on the side of working people. But we believe that this is not enough. If Labour wants to make a strong statement on “the cost of living crisis” that has been the crux of much of the party’s recent rhetoric, we must commit ourselves to a Living Wage for all.

Firstly, it is important to clarify that the Living Wage is not just an arbitrary number picked out to represent an abstract “decent wage”. It is calculated each year by the Centre for Research in Social Policy at Loughborough University as the required hourly rate for full-time workers to cover even the basic cost of living. We believe that, in the modern day, it is reprehensible that many households still live on what are effectively poverty wages and that an enforced Living Wage is the way to challenge this.

The new minimum wage is set at £6.31;[2] a full £1.14 per hour less than the current Living Wage.[3] Even Labour’s estimated rise in the minimum wage would likely only reach £6.91.[4] These may just appear numbers on a page, but for many, they are the difference between life’s basic requirements and a life of poverty.

At present, the Living Wage is endorsed by all major parties.[5] Ed Miliband has stated that he is committed to the campaign for a Living Wage and that the movement is “an example of the kind of politics” he wants.[6] Meanwhile, Mayor of London Boris Johnson has described it as “not only morally right, but [making] good business sense too.”[7]  However, as of yet all parties back the Living Wage only on the basis that employers that pay the rate deserve recognition. In our view, this is not an issue that can be challenged by word alone; action must be taken by government. Presently, countless major companies with huge profits, for example many major supermarkets, still pay their employees the absolute minimum wage and this simply cannot go on.

It is also worth noting that the Living Wage is an issue that disproportionately affects women in the UK, and as a result, a large number of single parent families. While 15 per cent of men are paid under the Living Wage, this figure is as high as 25 per cent for women.[8] With women far more likely to head single parent household, this leaves many caught between the need to work multiple jobs to sustain basic living for their family and the importance of a presence in their children’s development.

Those who argue against the introduction of an enforced Living Wage tend to argue along the lines that it restrains small businesses. However, this is not necessarily true. Such a rise in pay for huge swathes of the country would doubtless lead to increased consumer spending, offering the potential of stronger growth for many of these same businesses. Coupled with Labour’s pledged tax breaks for small businesses, there is no reason to believe that these businesses and their employees cannot both profit from a Labour administration.

Furthermore, a massive 80 per cent of Living Wage employers report an enhanced quality of work from their employees, along with a 25 per cent decrease in absenteeism.[9] Such statistics plainly show that the Living Wage should be a policy endorsed right across the political spectrum. One specific example of such success is that since implementing the Living Wage, Barclays Bank have retained a massive 92 per cent of their cleaning staff, compared to 35 per cent across the industry.[10]

Additionally, the current government’s rhetoric of “making work pay” could not be more appropriate to support for this policy. This government of millionaires thinks that the most effective way to do this is to further impoverish the millions of unemployed across the country, (itself a result of disastrous neoliberal economic policy). However, we contest that, if our government is serious about “making work pay”, the only acceptable course is to make this a reality and guarantee all workers a basic standard of living.

This is how Labour can win the “race to the top” that Ed Miliband has spoken of. We must not engage in the Tories’ favourite language of workers against the unemployed; we must create a system whereby no choice need be made between the two.

Alarmingly though, the need for a Living Wage grows greater by the year. In London, the gap between the national minimum wage and the Living Wage of the city has grown every year since 2007[11], with these statistics pointing to a radical drop in the most basic of living standards.  Moreover, all of this has occurred in a period of time when the most vulnerable in our society have been further hit by an economic crisis that has been used as an excuse to savage the benefits system that may previously have been used to alleviate some of this burden.

But ultimately, numbers and statistics can only say so much. The reality is, we as a country need to challenge the causes of poverty head-on, and the Living Wage can be an integral part of that battle. The Living Wage foundation estimates that the use of its recommendations has already lifted 45,000 families out of working poverty.[12] It is these numbers that should strike a chord with everyone, of all political shades.

The Labour Party has long now been criticised for moving away from its history of being a party for the ordinary people of Britain, no longer driven by a desire to challenge the vast inequalities we see around us. A promise to enforce a Living Wage in the next Labour Government would only be one step towards reclaiming the country’s trust that we can be that again, but it would be a step that makes an immense difference to the lives of millions. It is time for the party that gave this country a minimum wage to promise an end to poverty wages too.

If you are interested in joining the campaign for our University and Students’ Union to pay all employees a Living Wage, information on campaign meetings and actions can be found at https://www.facebook.com/sheffieldunilivingwage?fref=ts
For further information on the national campaign visit http://www.livingwage.org.uk/

Written by Christy McMorrow, edited by David Jeffrey