While many aspects of our lives have changed this year, a hard day’s work still deserves a fair day’s pay. The business case for paying the real living wage hasn’t changed, but we recognise and acknowledge that the context has. Our latest Supporters Network Webinar, in partnership with the Greater Manchester Living Wage Campaign, was on the topic of living wage accreditation in the current climate. Our panel - made up of representatives of the Living Wage campaign, employers who have been through the process and a trade union voice, provided guidance through accreditation. Below is a summary of the key points raised in the discussion, alongside a list of relevant resources and the full video recording.
Recent changes to the Real Living Wage
Last week, it was announced that the real living wage rates set by the Living Wage Foundation had increased from £9.30 to £9.50 outside of London, and from £10.75 to £10.85 in London. This increase will impact over 250,000 employees in the UK, and 9,000 in Greater Manchester alone – where 270 employers will introduce these new rates.
But, with Salford’s announcement as the first Real Living Wage City building upon Manchester’s ambitions to become the first city region in the UK to become accredited, there is still some distance to go. Recent announcements set out plans by the Mayor of Greater Manchester, to work with employers and industry groups to strive towards new targets to increase the number of accredited employers in the region.
This is a financially uncertain time for businesses, with repeated lockdowns and new tier systems leading to further economic pressures and subsequent job insecurities. However, since the beginning of March, over 800 employers have received accreditation from the Living Wage Foundation despite the current climate – highlighting the possibilities to maintain fair wages as a priority. The new Living Hours campaign encourages businesses to go even further, providing secure work alongside paying the real living wage. Find out more here.
The Business Case for paying the Real Living Wage
Many organisations are facing more economic pressures this year than ever before, creating a perceived barrier to the prospect of increased salaries. However, there is still a proven business case for paying the real living wage.
Ensuring that your employees have enough money to live comfortably is key to strong retention, engagement and morale. Financial concerns such as the inability to pay bills, or to pay off debt, can inhibit people from working to their full potential. Rowlinson Knitwear cited their customer satisfaction increasing from 43% to 98%, and colleague satisfaction from 34% to 100%, once they made the change to paying the real living wage - proving the potential business impact of this decision.
Whilst driving wages down is profitable in the short-term, considering the longer-term effects is important to ensuring a sustainable business. Finding this cost may include assessing the pay differentials between the highest and lowest paid in your organisation, and seeing if any cuts can be made to ensure that everybody is paid within a fair income bracket. Perceiving the associated payments as an investment, as opposed to a cost, can help to reprioritise the importance of paying the real living wage. Whilst this pandemic is hard, it is undeniably harder on those with a low income.
The People Case for paying the Real Living Wage
Alongside a strong business case, the moral underpinning of the real living wage is ensuring that people are paid enough to maintain good health – physically and mentally. Whilst income is not the only solution to mental health problems within the workplace, it is a good place to start.
A survey conducted by Usdaw in 2018 found that 63% of their members found financial worries were impacting on their mental health, with 76% relying on insecure borrowing to pay everyday bills and 50% missing meals to do so. Now more than ever, this is a time to make care for colleagues a central commitment within an organisation, ensuring that people aren’t suffering unnecessarily due to financial concerns.
Certain groups will be affected more than others – women, members of the BAME community and those without formal qualifications tend to be higher represented in figures of low pay. Some sectors will also face the impact differently, with 125,000 job losses this year in the retail sector alone – a sector typically associated with a high proportion of low paid workers. Paying a fair wage across the board will help to ensure inequalities between groups and sectors do not worsen, whilst ensuring everybody can enjoy a decent standard of living.
Daniel Howard, Programme Manager at Living Wage Foundation
Nicola Ryan, Director of Colleague Support at Rowlinson Knitwear
John Hacking, Campaign Coordinator at the Greater Manchester Living Wage Campaign
Chris Morris, Senior Researcher at Usdaw (Union of Shop, Distributive and Allied Workers)