The Case for theLiving Wage

South London Fawcett Society26 October 2009

What is the Living Wage?

The real minimum rate of pay that enables a worker to provide a decent standard of living for themselves and their family

In 2008, nearly 5 million employees in the UK paid less than £7 per hour.  Two-thirds were women.

Low pay and economic downturn

Over the past 10 years… Incomes of the poorest tenth have

fallen in real terms.  The profit share of GDP has risen,

as the labour share has fallen. Living costs have risen by 300%

while incomes of the poorest 10% have risen by only 53%.

The poor pay more

The real rate of inflation is much higher for lower income families  

Basic necessities -- energy, food and transport rose rapidly in 2007/8

Effective inflation rate on the goods and services used by low paid workers nearer 10%

Falling behind the cost of living

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100

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200

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350

1999 2009

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crea

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Earnings of lowest10%

Debt fills the gap

In 2008 UK households owed over £1.2 trillion on mortgages and £230 billion on credit cards and unsecured loans.

45% of UNISON’s school caretakers are in debt with 34%, owing £10,000 or more; 30% of social workers owe £10,000 or more

How much is needed ?

Minimum wage(01/010/2009)

Living Wage

£5.80 £7.00 - £7.60

Who pays for low pay?

Lack ofcivil

society

High benefits bill

Educationalfailure

High crimelevels

Poor health The

CommunityPays

Exported Costs

Low pay affects: education, health, criminal justice system, social services, benefit system state of civil society

Nearly half of the 3 million children living below the poverty line live in households where at least one person is in paid employment.

Tax credits cost the taxpayer £20 billion in 2007/8.

Exported Costs

Low pay linked to other workplace problems; poor training, limited career paths; high turnover, difficulties in recruitment; and a lack of bargaining power

Some examples: zero hours contracts; piece rates, charges for transport and uniforms, bullying and harassment, intimidation of migrant workers

The Living Wage campaignfirst stage: research

In 2001 UNISON started working with Telco – launched living wage campaign

Family Budget Unit researched the LCA for London -- 6.20 ‘living wage’ target

Looked at gap between earnings and living wage – Mapping Low Pay in East London

Research into ‘exported costs’ -- used to build coalition

The Living Wage campaignsecond stage: action

2002 claim submitted for 5 UNISON health branches to improve pay for contract cleaners

Negotiations and strike led to commitment to harmonise pay with AfC by April 2006

Meanwhile action at Canary Wharf led to deals with Barclays and HSBC

Third stage: mobilising the community

Listening campaign in the run up to the mayoral election in May 2004

Livingstone agreed to set up living wage unit. Boris Johnson has continued it.

First report March 2005: A Fairer London sets London Living wage at £6.70 with full benefit take up – now £7.60

Living wage has been won for 6,000 workers

1,000 East London hospital staff now on full NHS pay and conditions

3,000 contract cleaners at Canary Wharf and in the City of London

400 contract cleaning staff at Queen Mary and the London School of Economics, SOAS, Birkbeck

1,000 support staff working for Barclays Bank 100’s of workers contracted to the GLA family,

including Transport for London; Met Police third sector contract staff in organisations like

Child Poverty Action Group and the IPPR. More in retail, local authorities and the Olympics

Spreading the campaign

New MIS used to set out-of-London living wage

Glasgow, Oxford, Preston and several London Boroughs implemented LW, Norwich implementing it as part of anti-poverty strategy

Living wage built into local planning (Westfield) and the Olympics. Commonwealth games to come.

Living Wage can improve service

Since becoming a living wage employer turnover of cleaning staff at KPMG is down by 50%.

Better employment conditions lead to a better motivated workforce. "I used to wake up in the night and feel sick thinking about work", said one cleaner. Now that pay has improved "I feel proud to work in the hospital".

Living Wage can change lives

A recent survey found that, since the Living Wage was introduced at the Royal London Hospital, 75% of cleaners believe that they can now pay for their children's education. On their old salary 85% said they couldn’t afford adequate food.

What have we learned?

Make the primary employer responsible to the community

Chose locally focused, achievable goals

Unions must be involved Coalition is crucial

What are we aiming for?

Real social cohesion built through working together on common issues; struggling together and winning together.

When work pays…

‘The new pay means money for transport, clothes and food … and I can pay for school and children’s pencil case and books now …, you know …I feel like coming to work now ... because I am getting good money for my work … not like before’

---Royal London cleaner earning the living wage

Justice, not charity