The living wage is a matter of dignity

Ed Miliband and David Cameron are in favour, as are Nick Clegg, Boris Johnson and Ken Livingstone. For good measure, Winston Churchill was a supporter and even Geoffrey Chaucer argued for it in his Canterbury Tales.

It’s the “Living Wage”. This is not to be confused with the “Minimum Wage”, which employers are legally bound to pay.

This week is Responsible Business Week: a campaign by Prince Charles’s charity, Business in the Community, to inspire more companies to tackle pressing social issues and build a fairer society.

I believe that fair pay is one of the most-powerful ways for business to demonstrate its social purpose and make a positive contribution. Policies and practices need to be just and for the well-being of everyone; that’s how the potential of all staff can be realised.

What has all this to do with an Archbishop? As a Christian, I am inspired by the way Jesus Christ treated people; so I want to promote the dignity of every person and encourage them to believe in their self-worth. Employees are not raw materials, to be bought at the cheapest price and dispensed with where possible.

I had the privilege of chairing the Living Wage Commission, which reported last year. We found that five million workers, who are paid at least the Minimum Wage, may still be obliged to seek supplementary benefit or resort to food banks in order to make ends meet.

It is an irony that recent, improved employment statistics mean that the number of people paid less than the Living Wage has actually gone up. For the first time, the majority of people in poverty in the UK live in a working household.

Paul, a care worker in the North-west of England, spoke of his experience and his wife’s: “We have no luxuries, we have not been on holiday and we do not socialise. We work, eat and sleep... We often spend days apart... We can only communicate through rushed text messages and leaving voice mails for each other. Our 16-year-old daughter misses us greatly. We did not even have a day out together as a family in 2013.”

The statutory Minimum Wage is £6.50 per hour for workers aged 21 and over (much less if you are younger) whereas the Living Wage, essential for a basic income, is £7.85 per hour (£9.15 in London). For a full-time worker on a 39-hour, working week, that equates to £15,992 per annum (£18,556 in London).

The national Living Wage is currently calculated by the Centre for Research in Social Policy at Loughborough University; the London Living Wage is calculated by the Greater London Authority. The Living Wage Commission holds that employees working a full week should have enough take-home pay to support themselves and their families without needing to seek supplementary benefit or resort to food banks in order to survive.

Billions are spent from the public purse each year to top up the incomes of low-paid workers. Demand is sucked out of the economy by the lack of spending power of a fifth of the workforce. Tax receipts are also less than they would be.

One million people could be lifted out of poverty by paying them the Living Wage.

The good news is that many employers have already signed up to pay at least the Living Wage to all their employees. They include Barclays, Standard Life, Chelsea Football Club, the Greater London Authority and a number of local authorities and charities.

Guy Stallard of the worldwide accountancy firm KPMG, says: “For KPMG, paying the Living Wage is not just part of our values, our people strategy and our award-winning corporate responsibility agenda; it’s critical.”

According to Professor Jane Wills of Queen Mary University of London, over 10,000 families in the capital have been lifted out of working poverty as a direct result of paying the Living Wage.

When the whole workforce is paid at least the Living Wage, employees feel respected and their work valued. They have a personal stake in their company or organisation, so work becomes less of a necessary chore and more of a worthwhile occupation. They are more likely to stay with their employer and productivity goes up.

You may feel that the combined effect of these arguments is so powerful that the obvious solution would be to raise the statutory Minimum Wage to a liveable sum immediately. It’s not that simple. While there are employers who could thrive by paying every worker at least the Living Wage now, others would have to stagger it and some small businesses, industries and charities could not rise to it under present circumstances. We have never said it should be mandatory, and have proposed 2020 as the year for organisations to adopt it as a target if they can.

This qualification was conveniently overlooked by a tabloid reporter who found that some independently governed church institutions were paying less than the Living Wage, at a time when Church of England bishops were recommending it in principle. In fact, all the Church employers I know have it in their sights and hope to achieve it by the 2020 target date.

When it comes to the remuneration of employees, the Old Testament makes no distinction between the indigenous population and resident aliens: “Do not take advantage of a hired worker who is poor and needy, whether that worker is a fellow Israelite or a foreigner residing in one of your towns.”

Jesus put it succinctly – “The worker deserves his wages” – and the theme was taken up by Chaucer in The Somonour’s Tale.

“Thomas, of me thou shalt not be y-flatter’d,

Thou wouldest have our labour all for nought.

The highe God, that all this world hath wrought,

Saith, that the workman worthy is his hire.

Thomas, nought of your treasure I desire. ”

And Adam Smith wrote: “Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”

In short, when you as a worker get home at the end of the week, look at your pay packet and realise that it will not be enough to pay the bills, it is a blow to your self-respect.

We surely owe one another more than that.