Matthew Austin, 25, from Bristol, is celebrating some very good news. A PhD student at the University of Reading specialising in kinship in Anglo-Saxon England, he is also a recruit to the People’s Movement, launched on Sunday as part of Living Wage Week, which ends next weekend. Eighteen months ago, he and a friend began compiling a cost benefit analysis to persuade the university to adopt the living wage for its staff. He involved hundreds of students, organising a petition with a bungee rope game at the freshers’ fair to show what it feels like when economic security is always just out of reach.
And on Tuesday, Austin heard that the university will vote on his proposal to become a living wage employer at its next council meeting. “It’s cracking news,” he says. “Getting involved in the campaign is one of the best things I’ve ever done. A living wage makes sense ethically and from a business point of view. An ordinary person like me can bring about change. That’s powerful.”
Day after day last week, across the country, the plight of the working poor was brought vividly to life, as employee after employee gave testimony in the media on the impact of the proposed tax credit cuts to their minimal wages.
According to the charity, the Child Poverty Action Group, without the improvement that the chancellor, George Osborne, now promises in his autumn statement in three weeks, after the tax credits defeat in the House of Lords, a sole earner working full-time as a hospital porter was set to lose £2,049 a year; a dental nurse £2,027; and a teaching assistant £1,896. These are sums that also reveal the extent to which the public purse subsidises low-paying employers.
“These are grafting parents, often working long hours and trying to provide for their children,” says Alison Garnham, the Child Poverty Action Group chief executive. “The government has had the message loud and clear from right across the political spectrum: there isn’t a case for cuts that target working families, increase child poverty and damage family security.”
Living Wage Week, an annual event coordinated by the charity and community organisers Citizens UK, is launched with new research on Sunday that reveals that almost six million people (23% of the working population) are paid less than the living wage. This is nearly half a million more than last year and an increase for the third year in a row – up from 21% in 2013 and 22% in 2014. The living wage is not to be confused with the lower-rate “national living wage” announced by Osborne in his summer budget.
Against a backdrop of rising wages and falling unemployment, the news for those at the bottom of the pay ladder remains bleak, especially among women and young people. Seven out of 10 of those aged 18-21 now earn less than the living wage and 29% of working women (compared with 18% of men). On Monday the new hourly rate for the living wage is announced – currently £9.15 an hour in London and £7.85 outside London – along with the naming of the 2,000th organisation, a FTSE 100 company, to pay the living wage and gain accreditation from the Living Wage Foundation. It follows the news that Ikea, Oliver Bonas and Aldi are all to increase their hourly rate.
The living wage campaign, initiated in 2001 by a group of churches, charities, trade unions and schools in the east end of London, has made huge strides. That progress may be impeded, however, by Osborne’s political conjuring trick, which threatens to give the illusion of establishing a socially just wage floor for all. In July, Osborne announced a compulsory “national living wage” from next April, promising a pay rise for 2.5 million people. For over-25s, the rate will be £7.20 an hour, rising to reach 60% of the median wage across the country, possibly £9 an hour, by 2020, although the Low Pay Commission will estimate what the market can bear. Potentially, it is an increase that the Office for Budget Responsibility calculates will boost the income of the poorest by 13% by 2020.
So why do we still need a Living Wage Week? Neil Jameson, founder of Citizens UK, says Osborne’s “national living wage” is more accurately a higher national minimum wage, now set at £6.70 for over-21s. “Of course, we welcome an increase. By 2020 it will be the highest national minimum wage in Europe. But it still won’t be enough to live on,” he says. “It’s based on what the market can afford, not what a family needs so they can spend time together and have some quality of life. It’s compulsory, not voluntary; it will be hard to police; and, in the long term, we believe it will deliver far less for those who already receive very little in their wage packets. The 2020 target, for instance, is already lower than the London living wage now and we know there are already over a million Londoners in poverty in a working family – up 70% in a decade.”
Osborne may have kidnapped the language of the living wage and mutated its economic and social impact, but Jameson says the chancellor has also created a new danger. Under-25s remain on the minimum wage; for those aged 18-20 that is £5.70 an hour. “In social care, for instance, we risk older people being looked after by an army of the very young, because they will be cheaper,” Jameson says. “The real living wage includes everyone. Osborne’s higher national minimum wage doesn’t. That is a vital difference.” Citizens UK is considering how to refresh the real living wage campaign and make it an even stronger brand for employers to sign up to and feel the benefit. The living wage was originally defined as “sufficient to provide an adequate level of warmth and shelter, a healthy palatable diet, social integration and avoidance of chronic stress for earners and dependants”.
Even with Osborne’s increase, Jayne Meadows, 58, a care worker in a residential home for older people, from Milton Keynes, Buckinghamshire, says she will still face chronic stress. She has become a member of Citizens UK’s People’s Movement, launched as part of an effort to make living-wage high streets the norm across the country. For more than a decade, Citizens UK has been composed of institutions and organisations, now numbering 400, but now individuals can become supporters, campaigning in their own ways, in their own areas. Meadows says her Quaker faith encouraged her to become active. She recently addressed a business people’s meeting. “I stood up and told them what it was like to take home £945 a month. I work 12-hour shifts on the minimum wage. If I don’t work overtime, my rent takes up 50% of my wage packet.” She is delighted that two of the businessmen subsequently signed up to become living-wage employers.
Osborne’s change may mean she has to work six hours fewer a week, she says, “but it won’t make all that much difference financially. In residential homes, competition means costs have been cut to win contracts, so it’s difficult to see who can afford to pay the living wage, but something has to be done.”
The idea of the People’s Movement came from Emily Kenway, 29, a former opera singer and now campaigns organiser at the Living Wage Foundation. At Christmas 2013, she was recuperating from pneumonia when she read about the pay and conditions in Amazon warehouses. “It struck a chord. I’d been a customer for years and was appalled by the treatment. I’d never done anything like that before, but I set up an e-petition in protest and it went viral. Then we listed a fake book for sale – called A Living Wage for Amazon Workers – on Amazon’s own website to hit it where it hurts, and we used social media to spread the word.”
A remarkable interactive map launched by Citizens UK on Sunday shows how the living wage is spreading across the UK. If you enter your location, accredited living-wage employers – small shops and cafes, businesses and major companies – in your area are listed and will be added to, as numbers increase. “Consumers have clout,” Kenway says. “Shoppers can choose to give their cash to employers who pay fairly.” She acknowledges some businesses with very narrow profit margins may find it difficult to pay a living wage, but many who can don’t do so. “To be on the new map,” she adds, “employers have to guarantee all their workers, including contract workers, are paid the living wage.”
Last weekend, Deborah Leigh, 60, a retired special needs teacher from Chorlton, Manchester, went to the city’s football derby as part of her efforts to persuade Manchester City and Manchester United to pay the living wage. On Monday, as part of the People’s Movement in the Manchester area, she and her husband, John, also 60, will be making the business case for the living wage at a campaign breakfast. They will argue that the benefits can include lower turnover and recruitment costs, community engagement and higher productivity. “I am passionate about the issue,” Leigh says. “It’s about more than money. If you are stuck on the minimum wage, you can’t buy a flat, you make no progress, it’s bad for wellbeing and you’ve got no opportunity to mature.”
According to research by KPMG, a living-wage employer, while a quarter of FTSE 100 companies are now accredited by the Living Wage Foundation, 880,000 employees under 30 – many with degrees – earn less than a living wage. Leigh’s son, 26, is one. He has a biology degree and an IT qualification and does casual handyman work. She says: “I am part of the lucky generation; the least I can do is to campaign for those who follow.”
Torsten Bell, from the Resolution Foundation thinktank, has calculated that, if the cuts to tax credits originally planned had gone ahead, a single earner on a minimum wage earning £15,000 a year would have faced a drop in income of £1,500. That would not have been much offset by Osborne’s rise in the “national living wage”. For every extra pound earned, 80p would be lost in reduced benefits and higher taxes. Unless Osborne makes significant changes, a living wage will still be out of reach.
The Gloucestershire towns of Dursley (population 5,500) and Cam (8,500) were once thriving communities based on wool and then agricultural engineering. Now most people are on the minimum wage, sole traders and self-employed. Jobs are scarce, shops closing, transport links poor. “It costs £5.70 for an unemployed person to take the bus to sign on in Stroud. How much does that leave in a pocket?” says London-born Miriam Yagud, 59, a long-time local resident.
A qualified plumber, she founded the organisation Women in Manual Trades in 1975. She went to university as a mature student, retrained as a teacher and taught maths, English and farming skills to 16- to 25-year-olds until taking voluntary redundancy. She and her partner are also part of Night Stop, a charity that provides accommodation for homeless young people whose numbers are rising. “I have to do something that’s socially active,” she says. “I don’t see any other purpose for being alive.” For Living Wage Week, she has been asking people to fill in surveys on the cost of living in a rural community like Dursley. “It stimulates awareness of what is spent – and debt is an issue – and triggers a conversation in the community about what’s needed for a decent standard of living and for businesses to survive.” She says that, despite the low income, the undertaker’s, a company run by women providing social care, a hardware shop and an events company all pay the living wage. “A group of us were thinking how we could reward local businesses committed to paying the living wage. We thought about bouquets then decided definitely not. Paying the living wage is what should happen.
Every person interviewed in the People’s Movement survey conceded that Osborne’s “national living wage” had confused the public. His move has also resulted in other setbacks. After years of negotiations, campaigners say that John Lewis, Diageo and Tesco have cancelled meetings with Citizens UK on the grounds that they are waiting for the government’s compulsory living wage.
“Osborne’s higher minimum wage is welcome, but it’s not a wage on which families can survive,” says Neil Jameson. “No chancellor or government can take the people’s struggle for fair wages away from society. It’s a battle, but it’s one we are determined to win to ensure that this country is built on a genuinely decent standard of living for all.”
What is the living wage?
■ The living wage is based on the calculations of a decent standard of living. It is voluntary. It applies to all employees apart from apprentices, interns and trainees. The living wage in London – updated on Monday – is £9.15 an hour, compared with a median hourly rate of £15.82. Outside London the rate is £7.85 (hourly median of £11.08).
■ The government’s new “national living wage” is compulsory and based on what the Low Pay Commission decides the market can bear. From April 2016 it will be £7.20 an hour. It applies only to those over 25. It is a single rate for London and the rest of the country.
■ The national minimum wage is £6.70 for those 21 and over; £5.30 for 18- to 20-year-olds. Anyone aged 24 or under will receive only the national minimum wage from next April .
■ Women are considerably more likely to be paid less than the living wage than men. With 280,000 more women in work than last year, this year’s data shows 29% of working women – 3.6 million – earn less than the living wage, compared with 18% (2.3 million) of working men.
■ 72% of those aged 18-21 earn less than the living wage (17% of 30- to 39-year-olds). This equates to 880,000 employees of traditional university age failing to earn enough to pay for basic necessities.
■ People working in accommodation and food services, retail, administrative and support services are most likely to earn less than the living wage.
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