Earlier this month was Living Wage Week which was the first ever UK-wide week devoted to highlighting the need for employees to receive a wage they can live on.
The week saw the campaign generate much publicity, starting with Boris Johnson announcing an increased rate of the London Living Wage to £8.55 an hour (compared to its national rate of £7.45) and Ed Milliband pledging to extend its implementation through Government contracts.
More Liberal Democrats need to learn why the campaign for greater take up of the Living Wage is so important. While we have praised those employers that have voluntarily adopted it, in reality our own record of activity is not so great. Too often highlighting our record on reducing income tax for the low paid is almost an excuse for not doing more to tackle low pay itself.
Now of course reducing income tax on the low paid is a positive step. Why take tax away from those that aren’t even paid enough to live on? It also has to be said that curbing public transport fares is important, as fares take up a disproportionate share of the income of those on the lowest paid. Ensuring we maintain affordable housing is also critical.
However, is this really enough? Too many people are doing jobs which fall far short of providing an income that they can reasonably live on. Far from being able to live independently, they often have to rely on benefits to top up their incomes.
The Living Wage is an idea that has now been championed for over a decade and some of the employers that were first to adopt it are increasingly becoming aware that it has much wider benefits.
If staff are paid about £1.50 to £2 per hour more than the minimum wage they will normally feel greater loyalty and commitment to their employer. Other benefits include reduced turnover and a reduction in absenteeism
A growing number of local authorities and other public organisations, such as some universities, have adopted the Living Wage. From the private sector there are also a number of companies on board as well. It is also worth noting that some charities and voluntary sector organisations are signed up, as is it has to be said the Labour Party. We now need to get our own house in order.
It is time that far more local authorities, schools, NHS trusts and major private sector employees took a lead on this issue. Major hotel chains and retailers on the high street also need to take up the policy. Above all else, central government departments need to examine their own record and start to engage with the practicalities of becoming Living Wage employers.
In 21st century Britain no company should be profiting from the exploitation of its staff through the paying of poverty wages – and no local authority or other public body should seek to balance its books in this way, let alone a government department.
It is time that Liberal Democrats in government (local as well as national) stopped doing little more than just congratulating any company or organisation that signs up to the Living Wage. We need to get behind this campaign and ensure more of our fellow citizens feel valued at the workplace and are economically independent.
What better way to start boosting demand in our stagnant economy than by boosting the income of the hard-working poor?
* Cllr Stephen Knight is a member of the London Assembly and a councillor in Richmond.