Because more equal societies work better for everyone

Future Fairness

30 November 2012

By Larissa Hansford, One Society
This Monday marked the start of Living Wage Week – a very successful one so far. On Saturday, Ed and David Miliband announced their intention to make the issue a key Labour Party Policy, naming and shaming major firms who don't pay. By Monday Boris Johnson had announced an increase in the minimum hourly amount needed for a worker to meet basic needs by 25p to £8.55 and called for central government to adopt the policy.

Back in 2010 David Cameron said the Living Wage was an idea “whose time has come” and it seems he was right.

Local Authorities have played an enormous part in this primarily grassroots movement. A recent study by One Society found that 20 per cent of local authorities are committed to paying their staff the Living Wage, with another eight per cent considering it. Councils have also played a significant role in moving what once was a very London-centric idea away from the capital. 40 per cent of the local authorities who had introduced the policy were outside London.

As recession bites hard, many councils are feeling powerless to act on the large amount of workers still earning poverty pay. But others are fighting against the current. There are currently nine local authority 'Fairness Commissions' in the UK - a number that is steadily increasing. These bodies are tasked with assessing fairness and equality outcomes in their area and proposing approaches to tackle local inequalities.

Fairness Commissions have been very effective in making the case for Living Wage. They have pointed out that its introduction has tended to improve productivity, reducing absenteeism and improving motivation. They have found that increasing the pay of some of the poorest people in society acts to boost local economies and raise living standards in deprived areas. Some - the London Borough of Islington for example - have shown the practicalities of a living wage by implementing it without increasing costs.

The benefits of a Living Wage on a bigger scale would also drip down from a boost to the national economy and the increased public pot available were the government to put and end to taxpayer subsidised pay. The Institute for Fiscal Studies estimates that sub-living wage pay costs taxpayers £6 billion a year (due to the costs of in-work benefits etc). The cost of poverty to society and economy exacerbates these costs yet further.

The momentum for a living wage is building and Fairness Commissions have an important part to play in promoting the policy from the bottom up. Not only are local authorities are key in demonstrating to government what can be done on a local level, but they can also show the positive impact it can have for communities and economy, and what this could potentially mean on a national level.