Friday, November 9, 2012
The bid for a Living Wage, ensuring workers across the country are paid higher than the statutory minimum, stepped up a gear this week, when leading politicians and employers backed the campaign.
This week is the first ever UK wide celebration of the Living Wage and Living Wage Employers, and it saw London mayor Boris Johnson announce that the Living Wage rate in the capital is to increase by 25p an hour to £8.55, worth £4.5m a year for lower-paid workers.
The Living Wage rate everywhere else will also rise by 25p to £7.45, benefiting thousands of workers, and compares with the national minimum wage of £6.19 for adults.
While the minimum wage is mandatory, it is up to bosses whether or not they pay their workers the Living Wage.
Labour leader Ed Miliband also backed the campaign and met leaders of Labour local authorities across the UK who are already implementing the pay structure.
But what is the Living Wage? It’s an hourly rate set independently and updated annually, which is calculated according to the basic cost of living in the UK.
Employers choose to pay the Living Wage on a voluntary basis, but the case which its supporters make is that paying it reduces the benefits bill, cuts people’s individual debts and boosts the economy by encourage more spending.
An independent study of the business benefits of implementing a Living Wage policy in London found more than 80pc of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25pc.
Two thirds of employers also reported a significant impact on recruitment and retention within their organisation.
This week saw a newly-designed trademark that recognises and accredits employers which pay the Living Wage, with the Living Wage Foundation hoping the mark would become as recognisable as the Fair Trade logo.
Rhys Moore, director of the Living Wage Foundation, said the movement was growing as more employers realised the benefits of paying the rate.
“Like Fair Trade, it represents a new standard for responsible business. We hope to see the Living Wage mark and symbol spreading further and further across organisations in the UK.”
Norwich City Council’s cabinet last month vowed to work with businesses in the city to ensure people received a Living Wage.
The authority is also hoping to secure the Living Wage status itself, with deputy leader Alan Waters saying he hoped that would act as a “catalyst for change” across the city.
According to a report drawn up by the city council, estimates suggest 24,500 of Norwich’s 81,600 workers are paid less than £7.35 per hour.
Of these employees, 8,160 are thought to earn below £6.43 per hour. The minimum hourly wage for people aged over 21 is £6.19.
The city council’s report also suggests residents who are full-time employees in Norwich earn 12pc lower than the national median earnings, which stood at £26,200 in 2011 according to government figures.
Mr Waters said: “We are about to submit our bid for the status to the Living Wage Foundation and we’ve been working closely with them.
“We need to show that we pay staff at least the Living Wage which we do, but the difficult bit is when it comes to the council’s contractors.
“Part of the accreditation process is to show you have a timetable to ensure workers employed by contractors will be paid it. “As contracts come up we are looking to ensure it is written into the contract that they pay the living wage.”
He said the council had to “walk the talk” to encourage other companies in the city to follow suit.
The Green Party has long been campaigning for a Living Wage. The party’s new national leader Natalie Bennett visited Norwich last month and called for supermarkets to pay the Living Wage.
Aviva has been a London Living Wage employer since the programme’s inception in 2005 and has signalled its intention to become an accredited Living Wage employer.
But John Walker, national chairman of the Federation of Small Businesses, said it was not always easy for smaller companies.
He said: “Small firms want to pay their employees more, and recognise the benefits of doing so. However, they are struggling to manage cash flow in the midst of weak economic demand and increasing energy and fuel costs.”
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