The living wage campaign at 20: A force for good with work still to do

The living wage campaign celebrates its 20th anniversary today, appropriately enough with a raise. Run by the Living Wage Foundation, it sets the real living wage with reference to the real cost of living, rather than what the market will bear or politicians feel is acceptable. The hourly rates are going up to £9.90 outside of London, and £11.05 within the capital.

They will therefore remain substantially higher than what the government likes to refer to as the national living wage (NLW), which it quite clearly isn’t when you consider the cost of food, fuel, rent, etc They’re all rising, and quite quickly.

As things stand, a worker at an accredited living wage employer would earn £1,930 a year more than a worker earning the current government minimum. That’s the equivalent of seven months of food or bills.

They’ll still be £780 to the good when the NLW jumps to £9.50 in April. The gaps are wider still in London where living wage workers are £4,173 better off now, falling to £3,022 in April, to reflect the fact that the capital is one of the world’s priciest cities.

With that being said, it is fair to ask whether the campaign has a 20-year future, or even a five-year future because it is now quite possible that the two rates will, at some point, converge, given the government’s stated aim of bringing the NLW up to 66 per cent of the median average British wage. I think the campaign staff can relax. They’ll be making a living wage for some time to come because there’s clearly still work to be done.

For a start, some 4.8 million jobs, covering 17.1 per cent of employees, still pay less than the real living wage, which should be seen as a scandal to anyone other than the hard right-wing professors whose hot air really ought to be considered if Britain is to make good on its net zero climate promises.

It should also be remembered that the government’s NLW rates for younger workers are significantly lower than the headline rate for over-23s. This is despite the fact that a 21-year-old’s costs are no different to those of a 23-year-old if children are taken out of the equation.

That fact is, obviously, recognised if they work for a campaign-accredited employer – and there are some big, prestigious companies among their number – as opposed to an NLW employer.

Moreover, the median average British wage makes no reference to the cost of living. And there’s always a danger of politicians backsliding in response to pressure from those less enlightened parts of the business lobby that they have a disturbing habit of listening to. I’ll leave you to speculate as to why.

There is also the question of living hours. You’re not going to make a proper “living” wage if you can’t get enough of them, regardless of the rate you’re on. Hence the recently launched living hours campaign, which runs in parallel with the living wage campaign.

Signatories agree to provide workers with a guaranteed minimum of 16 hours per week, the right to a contract that reflects hours worked, and a month’s notice of shift patterns, among other things. Amid some fairly grim times, the living wage campaign unequivocally stands out as a thoroughly good thing.

It is still adding employers, too. Construction firms Taylor Wimpey and Persimmon Homes, Fujitsu, food delivery company Getir and Capita have all recently joined, and over the course of its life, it has secured £1.6bn of extra pay for its beneficiaries. More than 300,000 workers are now in that category.

The number may actually be larger still. Last year the Resolution Foundation, which calculates the rates under the oversight of the Living Wage Commission, pointed out that its impact goes beyond officially accredited employers. A number of firms quietly shadow it without seeking the badge.

The number of employers doing that may grow, given the labour shortages the UK is currently experiencing. As for those claiming it will kill off businesses, please. That’s the same hoary old argument deployed when the Blair government first introduced Britain’s first minimum wage.

It has, in point of fact, repeatedly been proved that firms paying the real living wage derive economic benefits from doing so, notably lower rates of absence and improved employee retention, something not to be sniffed at right now.

Clearly, there is value to be had through raising the floor, before we even get to the powerful moral imperative of paying fairly for labour. This helps to justify the campaign’s other ambition for the future: exporting the movement overseas. Long may it continue.