The Living Wage

Mention has been made in this election campaign of a "living wage". Just what is a "living wage", how does it differ from a "minimum wage", and why is it important?
 
Looking back through my files, I recalled that I raised the matter at the Amos Group back in 2008. An extract from the Minutes is given below, along with some research notes I presented to the meeting. I was inspired by an article in "The Tablet" magazine on the subject.
 
The Living Wage movement has certainly now expanded into the mainstream with endorsement from Boris Johnson, the Mayor of London. Indeed, the Mayor of London's office hosts a Living Wage Unit which monitors the level needed for a living wage in London (which has considerably higher living costs than the rest of the UK).  Boris said "paying the London Living Wage ensures hard-working Londoners are helped to make ends meet."
 
So it is not just a cranky left-wing project, but has an appeal across the different UK parties.  Back in 2008, matters were different, and it was just beginning to take off. A young Caroline Lucas, then Green Party MEP, now a Westminster MP, wrote an excellent piece extolling the virtues of a living wage in addressing poverty, and I included it in my notes.
 
Research in the United States shows that minimum wage laws and living wage legislation impact poverty differently: evidence demonstrates that living wage legislation reduces poverty. It is, perhaps, time to put it back on the local agenda.
 
High unemployment and zero hours contracts tend to push wages down, and while there may be sound economic reasons for that, it is not always the case, and employers can take advantage of the relative weakness of employees in the marketplace.
 
Pope Francis noted that there is often "a crude and naïve trust in the goodness of those wielding economic power." The living wage campaign is to do with corporate ethics, which is something that is often overlooked, and it reminds us that ethics is not just to do with private morality, but social justice as well.
 
http://www.ctj.org.je/Amos/2008_11.pdf
 
Minutes of meeting on Wednesday 5th November 2008 at 5.45 at Pastoral Centre, St. Thomas 
 
The latest minimum wage proposal is for £6.08 per hour. Tony said that we should press for a living wage. This has been championed in London recently by some large banks. He distributed a paper about it to all present. The aim is to ensure that junior employees should be paid enough to live on with a small buffer to cope with minor crises.
 
Living Wage, Minimum Wage: Some Notes by Tony
 
Should Jersey have any banding in its "minimum wage" like that of England, to allow for the fact that youngsters starting work often stay at home with parents? The converse to this, of course, means that those over 21 should be getting a higher rate of minimum wage.
 
How is the minimum wage calculated?
 
Should we also be looking at promoting the idea of a "living wage" especially with respect to Corporate employers whose UK Parent companies have signed up to that idea? Do any do this over here, and is it known?
 
Should we be looking at calculating a "living wage" as the basis for looking at increasing the minimum wage?
 
THE MINIMUM WAGE - UK
 
http://www.eveningnews24.co.uk/content/features/business/story.aspx?brand=ENOnline&category=Business&tBrand=ENOnline&tCategory=Business&itemid=NOED09%20Oct%202008%2010%3A16%3A04%3A620
 
The minimum wage came into force on April 1, 1999, guaranteeing a minimum pay rate to all workers for the first time in British history.
 
It was originally set at £3.60 an hour for over-21s and £3 for those aged 18 to 21.
 
On October 1, 2004, the minimum wage was broadened with a third, lower rate for 16 and 17-year-olds.
 
As of October 1 2008 the current levels are £5.73 an hour for over-21s, £4.77 for those aged 18-21 and £3.53 for 16 and 17-year-olds.
 
Given a 37.5-hour week the rate works out at about £11,200 a year for over-21s, £9,300 for those aged 18-21 and £6,900 for 16 and 17-year-olds.
 
On October 1 the rate for over-21s increased by 21p an hour - a 3.8pc rise.
 
Rate increases are decided by the Low Pay Commission.
 
Since the minimum wage was introduced the top rate has gone up 59pc.
 
A Living Wage for Britain
by Caroline Lucas, Green Party MEP, 16 October 2008
 
Total up the absolute basic living costs that families need to cover, and you get what's known as a poverty threshold wage - and every study finds this to be already higher than the minimum wage set by the government.
 
But a real 'living wage' must also provide a secure margin so that the family involved does not fall into poverty and debt when it faces the kind of day-to-day challenges those of us who are better off can take in our stride: a broken kettle, the need to buy shoes for a growing child, the cost of a train journey to visit a sick relative.
 
The absolute minimum needed for a basic existence, calculated by this approach, shows that the minimum wage falls well short of what's needed. More than a pound an hour short in fact. Every calculation of a living wage that has been done in towns and cities in the UK has found a living wage this year lies above seven pounds an hour. But from October this year, the minimum wage is just £5.73.
 
This means that anyone receiving the minimum wage is receiving poverty wages. And in 21st century Britain this is just not on.
 
If the Greens were in government, the national minimum wage would be set at least at the level of a real living wage. But meanwhile, we're pledged to use every piece of influence we can get to fight poverty pay.
 
In 2007, the lowest paid workers in the London Fire Brigade got a pay rise. Previously the people who clean fire stations were paid the national minimum wage, at that time just £5.35 per hour. But thanks to the work of the London Living Wage Unit, this changed and now the cleaners earn at least the London living wage of £7.45 an hour, enough to support themselves and their families at last.
 
What many people don't know is that the Living Wage Unit was set up under Ken Livingstone's administration thanks to the Green Party members of the London Assembly, Jenny Jones and Darren Johnson.
 
They held a casting vote over the Mayor's budget for four years and used it to get a fair deal for all London government's employees, and create the Living Wage Unit to calculate the amount needed to get by in the capital.
 
While they don't have the same influence over the new Mayor, Greens in London are continuing to support the efforts of groups such as London Citizens, the Fair Pay Network and The East London Communities Organisation fighting for fair pay for cleaners, shop staff and catering and hotel workers across London.
 
In Oxford, Greens have also succeeded in passing a motion through the city council, bringing in a living wage for council workers there. But when the Greens brought the same motion to Oxfordshire County Council this June, the Liberal Democrats and Conservatives shamefully voted it down. 
 
In Lewisham, the six strong Green Group is proposing a living wage for all council employees, and are proposing extending this to all council contractors as well. And our Deputy Leader, Adrian Ramsay (who is also taking part in Blog Action Day) defeated Conservative opposition to commit Norwich City Council to the principle of the Living Wage.
 
Over the next months, Greens all over the country will be following the example of Oxford, London, Lewisham and Norwich Green Parties. They will be campaigning hard so that millions more of the lowest paid workers in Britain get a decent wage.
 
The Greens have spent a long time being right about things like this, but pushed to the political margins. It makes me so proud that as we win more and more elections, we refuse to rest on those laurels but use that influence to make real changes in the lives of ordinary people who have also been marginalised by the establishment parties.
 
So next time you're tempted to think of the Greens as a single-issue party, ask a Fire Brigade cleaner.
 
http://www.bclocalnews.com/okanagan_similkameen/keremeosreview/opinion/30625854.html
 
Corporate social responsibility means paying a living wage that meets basic family needs
 
Families who work for low wages often face impossible choices: buy clothes or heat the house, feed the children or pay the rent. The result can be spiralling debt, constant anxiety and long-term health problems. Parents not earning a living wage work long hours, often at two or three jobs, just to pay for basic necessities, leaving little time to spend with family or participate fully in their communities.
 
In BC, the contradiction between a strong economy and growing economic insecurity is especially stark. BC has the highest child poverty rate in Canada, and over half of BC's poor children live in families where at least one person works full-time.
 
A living wage is one of the most powerful tools available to address this troubling state of poverty amid plenty.
 
The living wage is not the same as the legislated minimum wage. Rather, it is a challenge to those who are able, especially large public and private sector employers - to pay their direct staff and major contractors a wage that is based on the actual costs of living and raising children in a specific community.
 
Our recent report, Working for a Living Wage 2008, calculates that the living wage for Vancouver is $16.74 per hour, and for Victoria, $16.39. The calculation includes basic expenses for a family of two parents and two children, where both parents are working full time, and incorporates government taxes, credits and subsidies. Our living wage calculation is also enough for a single parent with one child, although a single parent with two children would have a much tougher time.
 
The living wage is a bare-bones budget, without the extras many of us take for granted - such as debt payments, or savings for retirement or education. And the amounts budgeted for recreation and emergencies are very modest.
 
Living wage movements have been gaining ground over the past 20 years in the UK, the US and a number of Canadian cities.
 
In 2004, the city of London, England became a living wage employer. And London's new Conservative mayor has declared that paying the living wage is good for business and good for the London economy.
 
A growing number of UK corporate employers have also adopted the living wage, including HSBC Bank, KPMG, and Price Waterhouse Coopers. And the 2012 London Games will be the first living wage Olympics.
 
These employers have found important benefits to paying a living wage: improved recruitment and retention; higher productivity; and being able to market oneself as a living wage employer.
 
But the living wage is not just about employers. Government policies and programs also have an impact on our standard of living, and as a result, on the living wage. Direct government transfers can put money into the pockets of low-income families. However, most government transfers and subsidies are reduced or eliminated once a family reaches an income well below the living wage.
 
The living wage is also affected by public services. A public child care system, affordable housing and lower public transit fares would all decrease the amount employers need to pay in order to provide a living wage.
 
If employers feel unable to pay the living wage, but remain committed to ending child poverty, then they should become advocates for these kinds of policy changes.
 
http://livingwageuk.wordpress.com/
 
SOAS (School of Oriental and African Studies) is set to become the next Living Wage university. It has now agreed to pay the London LW to all its outsourced contracted workers.
 
Elsewhere the London LW campaign is continuing to focus its efforts on the hotel and catering sector. In December 2007 the Hilton Group announced that all in house staff across 17 hotels would be paid a LW in 2008. Harrison Catering Services have since signed up to the London LW. Prior to the mayoral elections, Boris Johnson joined with the three other leading candidates in commiting themselves to promote the London LW, and all four also adopted a proposal that only hotels and restaurants who were living wage employers would be promoted by Visit London and tourist guides ahead of the Olympics.
 
Outside of London, LW campaigners are still celebrating the decision of Oxford city council to put its lowest paid employees on a living wage of £7 an hour from April 2009. This has raised hopes that other major employers such as Oxford University can be persuaded to follow suit.
 
The Scottish LW campaign has now gone public. It's trying to get as broad as possible a range of people and organisations on board, and will be convening an event in Glasgow in the autumn. A broadbased coalition is coming together to campaign for a living wage, which involves the Poverty Alliance, the STUC, churches and charity organisations.
 
Useful Links
 
http://www.policyalternatives.ca/
 
Has reports on Living Wage, and calculations for Canada with spreadsheet. Might be worth taking the calculation principles and seeing if we could apply them to make a spreadsheet for Jersey.
 
http://livingwageuk.wordpress.com/
 
The Living Wage UK page
 
http://www.church-poverty.org.uk/campaigns/livingwage
Church Action on Poverty Campaign
 
The Methodist Church, the Baptist Union and the United Reformed Church have all made commitments to pay a Living Wage to their employees already. The Church of England's Faithful Cities report, published in May 2006, called for the introduction of a Living Wage in place of the inadequate National Minimum Wage.
 
Living Wage: The partners
 
http://www.independent.co.uk/news/uk/home-news/insurance-firm-suspends-cleaners-who-joined-living-wage-campaign-774860.html
 
The following companies,institutions and organisations have made a commitment to pay their cleaners at least £7.20 per hour.
 
* Banking & Finance
 
Morgan Stanley
Citigroup
Deutsche Bank
KPMG
PricewaterhouseCoopers
Royal Bank of Scotland
MacQuarie Bank
 
* Universities
 
Queen Mary's University
London School of Economics and Political Science
 
* Government & third sector
 
Institute for Public PolicyResearch
London Fire and Emergency Planning Authority
London 2012 Olympic Delivery Authority (agrees to pay living wage to all contractors and sub-contractors on the Olympic site)
 
* Hospitality
 
The Hilton Group