The Who, What and Why of living wages

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living wage

living wageIf you read the newspaper and watch the telly, you would be forgiven to think that the hourly wages were going up.

Both the Labour and the Conservatives support setting a benchmark living wage of £8.55 and hour for London and £7.45 elsewhere. If you are on low wages, then chances are that you have felt hard up in the last five years. According the Office for National Statistics, annual income has decreased by 13% since 2008.

So what does this mean for you?

How is the proposed living wage any different from the national minimum wage?

If you’re aged 21 and over and are being paid lower than the national minimum wage of £6.19 an hour, you can take your employer to the court. The national minimum wage is a basic worker’s right. The national minimum wage is a nationwide gold standard and is enforced by HM Revenue and Customs (HMRC).

Contrast this with the living wage, which has been calculated by Loughborough University. According to them the living wage is the bare minimum rate that lets works lead a decent life. Whether you get paid this wage is entirely up to your employer and they cannot be legally forced to pay you this rate.

Who pays the living wages right now?

Sadly, only 140 employers do so. Obviously many employers pay their staff above this rate as it is. Around five million people in the UK are paid below the living wage rate.

Who is lobbying for the living wage?

Almost everyone is. From London Mayor Boris Johnson to Labour Party leader Ed Miliband; there is that very rare all-party consensus.

Foundations like the Joseph Rowentree Foundation had been lobbying for this for a while and recently launched the living wage campaign in London. Citizens UK, the charity that started the drive for living wages in 2001 says that some 45,000 people have been lifted out of poverty since then.

What effect will have all of this on you?

It is too early to say. The lead campaigners for living wages are targeting big firms that employ hundreds of people and can afford to pay the living wages but cutting back on bonuses at the top. They hope that the threat of naming and shaming employers that do not pay the set living wage would be enough to persuade many to pay their employees a better wage.