Living Wage of £10/hour: a quick policy guide
A living wage of £10 an hour by 2020 is a key Green policy. We live in a country where food banks are flourishing, housing is increasingly expensive, energy costs are high and many live in fuel poverty. Zero hours contracts and temporary and low-paid employment are increasingly the norm. Many people struggle to get by. A proposal by the Low Pay Commission to raise the minimum wage to £6.70 from the current £6.50 for over-21s simply isn’t enough – nor is a Labour proposal to raise the minimum wage to £8 by 2020. What is needed is a true living wage.
There are already plenty of employers committed to paying a living wage at a rate currently calculated by the Living Wage Foundation to be £7.85 an hour. These include large corporations, small businesses, charities, public sector organisations and social enterprises: Hearts Football Club, Oxfam, accountancy firm PWC, the Scottish Parliament, Standard Life, Breadshare Community Bakery, Citizens Advice Scotland, Falkirk Council, Glasgow Caledonian University and many others. Our policy of having a statutory living wage means that everyone will benefit.
The value of the living wage to low paid employees is clear. They find it easier to make ends meet. A living wage often means being able to turn down an extra job in favour of spending more time with family or taking classes to acquire more skills – but living wages are not just good for those receiving them – they’re good for those paying them too. Living wage employers have found they have higher staff morale and lower staff turnover. Far from being a drag on their business, the living wage helps them flourish and become more sustainable.
Moreover, the percentage of people on low pay has been rising since the 1970’s. Across the UK, a shocking 4.9 million people earn less than the living wage. This means higher demands on the government and on charities, greater stress for families and lower tax receipts. It is true that smaller businesses will need government help in the transition to living wage pay, but in the long run, the government will save as income tax receipts increase, and tax credits and benefits payments fall. Children will grow up in secure conditions, helping their intellectual and emotional development. The social problems that poverty pay creates and government struggles to solve will diminish.
One argument against the living wage is that it will reduce job creation. The same argument was made when the minimum wage was introduced in the UK in 1999, but sixteen years later there is still no evidence that job creation was reduced by its introduction.
The movement for a living wage or a minimum wage that people can actually live on is not just a Scottish or UK one. In the United States, Barack Obama has called for the federal minimum wage to rise from $7.50 an hour to $10.10. Cities and states have the power to set their own minimum wage at a higher level and several have taken action. Connecticut, Maryland and Massachusetts have all passed laws to enact increases to $10.10 or higher by 2018. Washington DC has raised its minimum wage to $10.50 for 2015 and $11.50 in 2016. San Francisco voters voted overwhelmingly to raise the city’s minimum wage to $15.00 by 2018, whilst in Oakland voters approved raising it to $12.25 this year, with further increases tied to the cost of living. In addition, Seattle is phasing in a minimum wage of $15.00 an hour by 2018 for large employers, or by 2021 for smaller ones.
Clearly, a living wage is feasible, as these examples show. We in the Scottish Green Party believe it is an economic and moral necessity. On its own it cannot solve poverty and inequality, but it is a strong start. It is affordable. It benefits employers as well as employees. Given the proven negative consequences of poverty for all our communities, and not just those directly affected, a living wage will benefit all of our society. Scottish Greens support all measures at local and national levels in support of the living wage. This is why a target living wage of £10 an hour by 2020, supported by a Scottish Living Wage Unit to help both employees and employers, is one of our key demands, and a central pledge to voters.
- Philip Grant is a member of the Edinburgh East campaign team for the Scottish Green Party.