Tuesday, 29 March 2016

Adoption of the living wage by a Conservative government should be viewed as a victory for the labour movement

The increase in the minimum wage to £7.20 an hour from the start of next month is a welcome move from the government. The increase of 50p per hour has been heralded as part of the rate escalation process that will help bring the minimum up to living wage level. The rate will be around £9 an hour by 2020.

Campaigners point out, though, that the present level recommended by the Living Wage Foundation is £8.25 an hour and £9.40 an hour in London, so the government levels are still someway short of the prescribed level to ensure people live above the poverty line.

The Conservative Government have rather captured the language of the living wage campaigners - made up of community organising groups, faith denominations, trade unions and progressive employers.

The intent on the part of Chancellor George Osborne is to get more money into the economy in order to keep the wheels of the market turning. He has realised that continually pushing riches toward the already rich, results in such individuals storing it away offshore or elsewhere. What they don’t do, necessarily, is spend it in the economy. People have to buy things to keep capitalism going. Individual debt levels cannot continually be pushed up to sustain demand amid a landscape of flat lining pay.

There is also ofcourse the other slight of hand which is whilst upping minimum wage levels, the Chancellor cuts away at welfare. The net gains to individuals coming from the “living wage” do not make up for the cuts being made in benefits.

All this said, it is important for living wage campaigners to celebrate just how far they have progressed. The position now is that of a Conservative Government telling employers they must pay employees a minimum living wage.

Think back to 1997, the beginning of the Labour government’s time in office, when the minimum wage was first proposed. The howls of opposition from the Conservative Party and employer organisations about the damage it would do to business, the loss of jobs etc. None of the claims proved true, with many of the doubters now converted to advocacy.

The story of the living wage campaign in the UK is remarkable. It began in 2001 with community organisers London Citizens. They took soundings amongst their community groups, many being faith organisations. What came back was the difficulties being caused for community and family life by poverty wages. Respondents told how they were having to do two or three low paid jobs in a week just to keep their heads above water. Sectors like cleaning, catering and security were particular offenders.

London Citizens together with the support of a number of trade unions began the living wage campaign. Research undertaken came up with a living wage level of £6.30 an hour on which it was considered people could live above the poverty line. Employers were then asked to sign up to pay the rate.

Many encounters then followed. The community organisers tried polite letters, requesting meetings to put points to business managers. Some of these requests succeeded, others failed. Failure resulted in direct actions, such as church parishioners and nuns turning up in Oxford Street to bank thousands of small coins that had been collected. There were demos outside.

The institutions did not like this bad publicity and usually came to the negotiating table. I remember one particular meeting in a drafty church hall in the east end, with then Chair of HSBC, Sir John Bond. Sir John was faced with a number of priests, a bishop, trade unionists and community leaders arguing that the bank should pay its cleaners a living wage. The meeting did not bring immediate success but further down the line HSBC became a living wage employer.

Then London Mayor Ken Livingstone took up the idea, establishing a living wage unit at City Hall. The unit set a living wage level each year. The living wage was implemented with those parts of London government that the Mayor controlled. The Mayorality also insisted that any contractors it dealt with pay their employees the living wage.

The living wage theme was  enthusiastically continued by Conservative Boris Johnson when he became mayor in 2008.

Trade unions came to take on a much more central role in pushing the living wage concept nationwide. There had been concerns about regional variations in pay being encouraged by the idea.

Initially, trade union branches had been members of London Citizens. The community organisation was able via its faith connections to make contact with workers in insecure environments in Canary Wharf, where previously the unions had struggled to get a foothold.

Then, as momentum built, the unions came to the forefront, many like the Communication Workers Union, Unite and Unison becoming living wage employers themselves.

The campaign has grown and grown, gaining public and mainstream political support. Employers recognised the value of paying a living wage, seeing it resulted in less turnover and better morale. There was also much corporate social responsibility PR value in being associated with the living wage.

A snapshot of the benefits resulting from the living wage, can be seen in London, where it was estimated that £182 million had been added to wages of 19,000 employees between 2005 and 2013. On the down side, it was estimated that 22% of workers (5.28 million) still earned under the living wage as of 2014 across UK.

Government has increasingly seen the value of the living wage for the reasons outlined earlier. It also increases the tax take as more people will be paying more tax.

So at a time when no doubt many of those campaigners who have fought for the living wage down the years may feel a little aggrieved to see the government seizing the concept for its own, this should be viewed as a victory. There are caveats such as the minimum wage level increases being implemented by the government, still do not bring wage levels up to the living level as stipulated by campaigners. Also, the cover being provided for benefit cuts. But overall the fact that a Conservative Government has accepted and now implements the living wage concept forcing all employers to pay a minimum living wage should not be underestimated. It is a major achievement for progressive politics and those across the labour movement and faith communities who have struggled for this basic right for so long.

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