Moral outrage about the Living Wage isn’t enough: it must be backed by legal muscle

The fact that we are even talking about the Living Wage is a sign of past failures.

To mark Living Wage Week, Left Foot Forward has invited writers to contribute to a series on wages and the cost of living

The fact that we are even talking about the Living Wage is a sign of past failures

The news this week that nine in 10 big businesses in London aren’t paying all of their employees enough to live on should come as a major shock. The fact that few people will be surprised says much about the state of the supposed economic recovery. An economy that is failing to lift living standards for those at the bottom is one that can never be sustainable.

The fact that we even have to talk about a ‘living wage’ is a symptom of that failure. The post-war generation took it for granted that the ‘wage’ received in return for a day’s labour would be enough to live on – indeed it was expected to support a dependent spouse and children.

One wage was supposed to be – and most often was – enough to support a whole family. The idea that anyone could be paid less than what they needed to pay the rent and put food on the table would have been completely alien to anyone working in the 1960s and 1970s. Strong trade unions ensured that prosperity was more evenly shared than it is today.
No one, however, is suggesting that all we need to do is wind the clock back and all will be well – too much has changed in the last 30 years. We need new tools to achieve just outcomes, to make sure that no one is left behind, and that work is adequately rewarded.

The Living Wage is one such tool: independent analysis that calculates the minimum someone needs to live on; a set of standards to hold companies to account; and behind it a campaigning organisation that cajoles, harries and harasses the miscreants.

Citizens UK deserves huge amounts of credit for setting up the Living Wage Foundation and for making the payment of poverty wages a political issue. From small beginnings in the East End of London the Foundation has become a major force with more than 1,000 employers now signed up to pay their staff a living wage.

But we need to go much further.

Across the UK more than 5 million people are paid less than the living wage of £7.85 an hour (£9.15 in London). Nearly half a million of them work in the public sector. That’s five million lives that are being blighted by corporate greed and government apathy.

The national minimum wage has the potential to make a big difference to those five million people. But successive governments have presided over a system that sets the rate far too low. £6.50 an hour falls a long way short of providing enough to make ends meet. And if you’re under 18 years old you could be legally getting paid as little as £3.79 an hour – less than half of the living wage level.

It would help to put more money into local economies – Joe’s corner café would be helped to pay the living wage when the street sweepers outside can afford to pop in for a cup of tea, and when the homecare workers (now mostly not even paid the legal minimum wage, with their travelling time between appointments not included in their hours) can gather for a slice of cake after a hardworking day.

Those small business would also be put into a better position to pay the living wage were the playing field with big business and multinationals to be levelled. If big business was made to pay fair taxes, was made to treat staff fairly – not just with a living wage but also by banning zero-hours contracts – and was made to pay its small suppliers fairly and on time, then smaller firms and cooperatives would have a better chance to compete and prosper.

The living wage is an idea whose time has come. That’s why the Green Party wants to back up moral outrage with legal muscle. Under our plans every worker aged 16 and above would be entitled to the full minimum wage. We’d raise the minimum wage so that it matches living wage levels and increase it every year. By 2020 no one would earn less than £10 an hour.

Making the Living Wage a mandatory requirement for all employers would begin to make our economy work for the low paid. That’s what I’ll be pushing for this Living Wage Week.

Natalie Bennett is the leader of the Green Party. Follow her on Twitter

29 Responses to “Moral outrage about the Living Wage isn’t enough: it must be backed by legal muscle”

  1. timworstall

    Sigh.

    Natalie, come on.The outrage is that the current minimum wage is *taxed*. Income tax and national insurance are paid by people making the minimum wage. This is an outrage. People in that poverty have to pay tax to pay the salary of Caroline Lucas.

    What we need to do is raise the NI and income tax limits to the full year, full time, minimum wage.
    . That gets us to the current Living Wage, post tax, being 35 p an hour away from the no-tax minimum wage.

    After all, if you’d like the working poor to have more money, and who wouldn’t, why not try nicking less of their income in tax?

    And my apologies: anyone not with this program. Sorry, but you’re just not being serious. A good way for the poor to have more money is to stop taking it from them.

  2. Paperworld

    Sigh indeed. Whoever wrote this article, apparently the leader of an ecological party, has an offensively naive idea about how money circulates, how to tackle poverty or how to spread wealth in a more equitable manner. Perhaps left foot forward can find writers who do not offend the hopes of millions of underprivileged people in these times of need.

  3. Guest

    So the outrage is that the poor have access to JSA and Pensions, as you rmove them from NI, That there is not another middle-class tax cut, paid for by slashing services for the poor.

    “More money”, to vanish down the maw of basics they now have to pay for, as you are all for stealing more of their cash for those.

    No surprise you’d only pay Tory politicians, either, as you scream that anyone not with the program of lowering the poor’s available cash for food and rent, and for denying them pensions and JSA is “not serious”.

    Keep pushing that Tory line!

  4. Guest

    Oh right, an argument for more cash for your “underprivileged” rich.

  5. Leon Wolfeson

    Wasn’t your policy a Living Wage?

  6. Tegwyn Hill

    Well said. It is such a pity that the main governments cannot use their intelligence and see that if people are earning a living wage they will not need to claim benefits and will therefore reduce the deficit and if the loop holes used by the unscrupulous, greedy tax dodger were closed we might even be able to start reducing our Nat. Debt. If only people would stop voting tactically and vote for the party they would most like to see running the country, irrespective of whether they can win, surely that would send a message to the main parties. I had already made up my mind to vote for the Green Party, this confirms I am right in doing so.

  7. Peter Martin

    It’s all very well huffing and puffing about the need for the payment of a living wage but wages are determined by the same market forces of supply and demand as other prices.

    If we want to raise wages, the demand for labour needs to be increased. That can be done in three ways:
    1) by encouraging the private domestic sector to spend more ie by creating a credit bubble, the Tories’ favoured ‘solution’.
    2) By devaluing the pound and increasing exports. Unlikely IMO
    3) By government spending more.

    There aren’t any other possibilities. If they are please let me know!

    Then on the other hand there is the question of supply. That means discussing levels of immigration and that is just about impossible with the present day political left without attracting accusations of racism. So I won’t bother going there right now.

    But, like it or not that’s the reality of the situation. Either the left faces up to it or continues to wring its hands in despair at the problem.

  8. Paperworld

    If you mean that the article is so inadequate that it helps to preserve the current status quo of making the rich, richer, then yes, I agree with you.

  9. Paperworld

    This leader of a party is a joke. For instance, she writes, “Nearly half a million of them work in the public sector.” Well, read closer the report, no matter it says, those people paid less than the minimum wage work at the public sector but through public procurement.

    Then, she adds, “that’s five million lives that are being blighted by corporate greed and government apathy.” So according to the author, it’s “government apathy” that destroyed the unions, that shreds workers’ rights, that introduced zero hours contract, that legislates assiduously to make the rich, richer.

    And the shittiest blow to the living wage is this, London minimum wage stands at £9.15, but the Green leader wants to push that up by 75 pence in 2020. Fuck off, and I mean that in the nicest possible way.

  10. Paperworld

    Correcting my comment, the London living wage is set at £9.15 and the Green leader wants to increase the minimum wage by 75 pence in 2020. Even the Conservatives could do better than that by 2020.

  11. timworstall

    I’m always puzzled when people make this claim. For we’ve already got a solution, one that we use. If you earn between (approx) £110 and £153 a week you don’t actually pay NI. But the government acts, and accrues your pension etc, as if you do. So we just extend that system.

  12. wildejamey

    So talking about this, this is another area where Miliband’s initiative to get to £8 for the minimum wage over 5 years has done more harm than good in it’s Tory-like meanness. No wonder his core vote is deserting the party in droves. I’m thinking of voting Green even though I’m in a marginal Labour seat.

  13. wildejamey

    What you can still do under capitalism is redistribute resources away from molly-coddled large business and the wealthy – and there’s too little of that. A living wage is only a small step in that direction.

  14. David Stringer

    4) Government regulation. This is what the minimum wage is, with the living wage merely being a logical extention of a principle that all the major points agree on.

  15. David Stringer

    Care to explain where and why she’s wrong, if it’s so obvious?

  16. David Stringer

    I think the intent is that successive governments have been passive in letting corporations introduce zero hours contracts and believed corporate propaganda about how reducing workers’ rights are good for profitability, and therefore the entire economy (TTIP being the next, most blatant version of this). Obviously, greed and stupidity are equally valid explanations for their actions.

  17. Peter Martin

    Government regulation doesn’t create any extra demand or spending power in the economy. That’s not to say that government should not regulate against unscrupulous employers but, as the experience of the EZ shows, social laws alone aren’t going to fix the problem of low demand for labour which is the root cause of low levels of pay and high levels of underemployment and unemployment.
    When demand for labour was strong, there was no such thing as a zero hour contract. Not because it was illegal. In fact, no-one had never heard of the term until relatively recently, but because employers had to treat their workforce fairly. Otherwise, they’d leave and find work elsewhere and certainly the unions would have had enough muscle would sort them out! That was the situation prior to the 80’s. Thatcherite neoliberalism changed all that. Its known as austerity economics now. That’s the main problem.

  18. blarg1987

    Which raises a new question, how would you cover this cost?

    Do not get me wrong I believe we should get people out of tax who are on the minimum wage, but be curious how would you fund it or what service provisions would you cut to cover the cost?

  19. David Stringer

    Higher minimum wage regulation forces money out of the hands of executives, into the hands of the lower-paid, then that moves it around local economies.

    I agree that it’s not enough by itself though, I think the state should do much more in training people up, as well as ambitious building programmes where appropriate.

  20. Peter Martin

    It’s true that transferring money from the wealthy to the less wealthy certainly means that it is more likely to be spent quickly rather than saved, or spent locally rather than on expensive imports etc.

    I would agree even more that the key to getting the economy moving lies in spending on infrastructure. The costings for this kind of spending are largely superficial and based only on top line figures. But, most spending by government very quickly comes back as taxes. All money spent on wages and salaries, for example, is subject to income tax and National insurance. So straightway some 30% or so comes straight back. Then there is a wage cost in the supplies of steel and concrete. That too generates more taxation revenue on the first spending.

    Afterwards, money is spent and respent. Each time it attracts a whole range of taxes. VAT, CGT, Duty of fuel. etc etc. And yet more income tax and NI at each stage. The increased economic activity takes workers off the dole and saves on welfare payments.

    When challenged about the deficit, this is how any self respecting Labour politician should be explaining how it “can be afforded”. Anything that is available for sale in the economy “can be afforded” in that sense. Whether it should be is another question. The only potential problem is the creation of inflation, which doesn’t look too likely right now, but when and if it does become a problem that would be the time to throttle back.

  21. David Stringer

    There isn’t much I can disagree with – or even add to! – in that.

    There is always the fear of going too far with regulation and government spending, but at the moment, we’re a long, long way from that.

  22. Guest

    No, Capitalism is not “market”, capitalism is anti-market. It’s about, in this case, free-riding as hard as possible on the government, paying as little as possible and having the taxpayer pick up the bill.

    Your supply-side answer has never worked, as you argue that only by ending trade and smashing the economy can you cut demand and massively lower wages, as you straight to your racism and show it off.

    And of course you’d close to borders to stop people escaping your low-wage, low-skill economy.

  23. Guest

    Is the main “problem” the Other or the Austerity which you’re so keen on, even as you admit it’s the main problem?

    You conflate cause and effect, of course, as you ignore the fact zero-hour contracts are not new – Thatcher reintroduced them for Dockers, for example.

    It wasn’t *called* that until recently, that’s all. Your Tory narrative…

  24. Guest

    No, it’s called spending the cash to collect due tax, which your Tories have opposed and taken action against.

    And now the key is “infrastructure”, when previously it was the Other, and then your Austerity.

  25. Leon Wolfeson

    Probably wasting your vote, thanks to FPTP, which is the problem there. You campaign for voting reform, right?

    I also can’t sign onto their plans to prevent the poor having heating and lighting.

  26. Guest

    So you’re puzzled by facts, as you try and wave your hand and say “oh people would get it”, as you ignore the fact there’s no proposal on the table to extend it.

    The proposal is to strip people of pensions and JSA. To save money.

  27. Guest

    So you didn’t read my comment…

  28. Peter Martin

    Leon/Guest,

    “Suppy-side economics” is the favoured approach of the political right. They like the idea that an unemployed person is only unemployed because they don’t have the required level of skill. In the case of any one individual, that could well be true. Anyone who could play football to a good professional standard, for example, probably wouldn’t be unemployed.

    But of course in reality, if everyone were to increase their skill level by 20% say, that wouldn’t change anything on the macro level. If there are 100 dogs looking for 90 bones then 10 dogs will be boneless at the end of search regardless of their aggregate skill level. Although it is likely that the most skillful dogs will be the ones finding the bones.

    So, whereas “supply side” economists would tend to ignore all that, and solely argue for better training for the dogs, a more intelligent approach is to look at all factors. Yes we need better training, but we also need to include the numbers of bones and the number of dogs looking for bones in our thinking too.

    PS I like dogs and I’m in no way using the term derogatively in this analogy!

  29. timworstall

    It is?

    Wow!

    I’m actually the original source of the argument. That the allowance should be raised to the minimum wage. And I never knew that’s why I was suggesting it!

    Or, you know, you could be spouting bollocks?

Leave a Reply