Will consumers support Living Wage products and services?

Will consumers make it worth employers’ investment in the Living Wage, by shifting their custom to those who pay decent wages?

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IPPR and the Resolution Foundation have published research (pdf) today on how much implementing a Living Wage policy would cost businesses by sector.

It is not as much as you would think, generally being no more than about five per cent increase in the wage bill for all sectors other than restaurants and bars:

“The results make clear that the estimated average wage bill increase as a result of implementing a living wage across different industrial subsectors is closely associated with the proportion of jobs currently paying less than a living wage within them.

“The results show that the estimated average wage bill increase as a result of introducing a full living wage (scenario one, or £8.30 per hour in London and £7.20 per hour elsewhere) is significant in the major low wage sectors of general retailers, food and drug retailers, and bars and restaurants (yielding an increase of between 4.7 and 6.2 per cent) while relatively small in other sectors (an increase of around 1.0 per cent or less. [As Figure 4 shows].”

Figure 4:

Average-firm-level-wage-bill-increase-by-industrial-sub-sector
Once wage spillover effects – any increases to those already receiving a living wage as a result of the implementation of the policy – are included, it adds up to a further 0.5 per cent to wage bills. Moreover,the report is restricted to looking at London Stock Exchange companies, who will be far more resilient than small businesses.

Living Wage campaigns tend to aim at businesses voluntarily adopting the standard, not increases in the statutory national minimum wage.

Therefore, the question is whether consumers will make it worthwhile for employers to invest in Living Wage, by shifting their custom to those who pay decent wages.

There is room for optimism. The Fair Trade market is now worth more than £1 billion per year. Meanwhile, major firms such as Kelloggs, PG Tips and Hovis are willing to invest in kosher accredition, despite there only being around 200,000 Jews in the UK, of whom only a fraction will be kosher-observant, showing how small shifts in consumer behaviour can effect the dynamics of business investment.

 


See also:

To end inequality without redistribution of wealth, we should pay a living wage 8 Dec 2011

Fair Pay Network make the case for a living wage 28 Nov 2011

Savage lifts the lid on Low Pay Britain 4 Oct 2011

UNICEF calls for Living Wage to enable better work/life balance 14 Sep 2011

Exposed: Tesco fat cats (profits: £3.8bn) fail to pay cleaners a living wage 21 Jun 2011


 

Trade unions and churches have access to millions of consumers. If they got behind a public awareness programme, the effect could be dramatic.

 


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21 Responses to “Will consumers support Living Wage products and services?”

  1. Declan Gaffney

    Key issue on living wage is whether consumers would switch to accredited LW employers //t.co/Pbx3tEU4 Won't know till someone tries.

  2. nobrightside

    Will consumers support Living Wage products and services? //t.co/sNNOcdXw via @leftfootfwd #livingwage

  3. jenny bates

    Will consumers support Living Wage products and services? @leftfootfwd //t.co/D7v7TEgM #ippr #LondonCitizens

  4. leftlinks

    Left Foot Forward – Will consumers support Living Wage products and services? //t.co/mqW0ECyy

  5. Richard Darlington

    The #livingwage is affordable – review of new report from @IPPR & @resfoundation by @danielelton on @leftfootfwd – //t.co/DSwzZZMn

  6. Dr Dan Lyons

    Will consumers support Living Wage products and services? @leftfootfwd //t.co/D7v7TEgM #ippr #LondonCitizens

  7. P McCarvill

    The #livingwage is affordable – review of new report from @IPPR & @resfoundation by @danielelton on @leftfootfwd – //t.co/DSwzZZMn

  8. ResolutionFoundation

    Will consumers support Living Wage products and services? @danielelton discusses @resfoundation research //t.co/S6ZT4lEb

  9. BevR

    RT @leftfootfwd: Will consumers support Living Wage products and services? //t.co/3kswKHvF

  10. S

    Will consumers support Living Wage products? //t.co/kOMZ8NcM asks @DanielElton #LivingWage @IPPR @ResFoundation

  11. Anonymous

    You haven’t asked consumers, or told them, how much extra that will mean on their bills.

    Meanwhile, you advocate getting in lots of migrants to work on the cheap.

    That’s going to escalate with economic refugees from the mad cap policies in the PIIGS.

    End result isn’t going to be pretty.

    But who cares, we can borrow lots of money and shaft today’s children.

    No debt forgiveness for corrupt leaders in the UK.

  12. Anonymous

    Ah yes, the mythical low-wage migrants. When in fact, they tend to do better than the average UK-born resident. The flow is going to be – and IS – the other way: people with sense are fleeing the disaster of the UK. Moreover, the government is practically forcing the bright kids to go to University abroad.

    And you want to starve the poor today, ensuring that there are no children anyway.
    And exactly – no debt forgiveness for you. PAY UP!

  13. Kayte Lawton

    Will consumers support #living wage products and services? //t.co/qNwPGse0, from @danielelton @leftfootfwd

  14. BevR

    RT @leftfootfwd: Will consumers support Living Wage products and services? //t.co/3kswKHvF

  15. Foxy52

    RT @leftfootfwd: Will consumers support Living Wage products and services? //t.co/3kswKHvF

  16. JC

    This article appears too often. What’s wrong with taking the lower paid out of taxation? I’m on the minimum wage and last week paid over £35 in NI and income Tax. That’s over 13% of minimum going on taxes. Is this right?

    Take it away and I have a substantial pay rise (nearly to the Living Wage). If this was done, it would be at no cost to the employer. If Employer’s NI were abolished, I might be able to get it all and be paid more than the Living Wage. Isn’t that a better campaign?

  17. Look Left – Miliband’s speech, the Queen’s Speech and Vidal Sassoon | Left Foot Forward

    […] on how much implementing a Living Wage policy would cost businesses by sector. As Left Foot Forward reported on Thursday, it is not as much as you would think, generally being no more than about five per cent […]

  18. ChurchActionPoverty

    Will consumers support #living wage products and services? //t.co/qNwPGse0, from @danielelton @leftfootfwd

  19. Arianna Andreangeli

    Will consumers support #living wage products and services? //t.co/qNwPGse0, from @danielelton @leftfootfwd

  20. Hotel group leads the way in granting London living wage to hospitality staff | Left Foot Forward

    […] See also: • Will consumers support Living Wage products and services? 10 May […]

  21. Why not pay the living wage? The cost to employers could be minimal | Left Foot Forward

    […] Will consumers support Living Wage products and services? 10 May […]

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