Comment: Labour should be setting the terms of the living wage debate

As well as a wage increase we need to see an end to employment practices that undermine the living wage


For at least 6 million workers in the UK, work simply doesn’t pay. For these workers the demand for a living wage is a crucial one, a simple one. But for those earning less than a living wage the principle of a decent day’s pay for an honest day’s work is not bearing up.

The call for a living wage has been the cornerstone of Labour movement demands since the birth of new trade unions in the 19th century. And yet with the Living Wage Foundation rates announced this week as part of living wage week at £9.40ph in London and £8.25 for the rest of the UK, it is clear that the Labour movement has lost ownership of the campaign for a genuine living wage.

George Osborne has been desperately trying to redefine the minimum wage as his so-called new ‘living wage’ of £7.20ph from April 2016 for those over 25. That the space even exists for the Conservatives to lay claim to the concept of a living wage further highlights the chasm that has opened up around this debate.

Now more than ever it is essential for the Labour movement to make concrete, coherent demands for a genuine living wage linked to an end to the employment practises that undermine pay increases.

The reality for both the Living Wage Foundation and George Osborne is that neither of their rates fulfil the definition of a genuine living wage and neither delve far enough into addressing the issues of low pay, insecure employment, low and zero hours contracts and the cost of living which are failing to deliver the much- lauded recovery for millions of working people.

Included in The Living Wage Foundations calculation of a living wage is the addition of in-work benefits. As we have seen over the past few weeks with the attempts to cut working tax credits, in addition to cuts to housing benefit through the Bedroom Tax, a living wage figure that relies on in-work benefits can not be considered reliable. A living wage must be one which ends taxpayer subsidies for low wages.

The cost to the Exchequer of workers paid less than a living wage is now estimated at £3.23 billion by the GMB trade union and the Centre for Labour and Social Spending) (CLASS) in social security spending and lower tax receipts.

The GMB and CLASS have also set out some key demands for a genuine living wage (and beyond) to ensure that work pays and the need for taxpayers to subsidise low wages is ended.

These include:

  • £10ph minimum wage as part of a 40-hour week.
  • Guaranteed hours of work with an end to low hour and zero hours contracts
  • An end to the over of agency workers, many of whom are exploited through loopholes in the law (the Swedish derogation regulations), stopping them from receiving equal treatment to their permanently employed colleagues.

Whilst the Living Wage Foundation increases are welcome, the Labour movement must not shy away from setting the terms of the debate. A living wage which does not also address insecure employment, low and zero hours and the reliance on in-work benefits is no living wage at all.

At the forefront of fighting for these demands must be the trade unions. Workers’ demands must be bold and unflinching. A living wage must not be seen as an ethical favour given to a worker by their employer, but as the rightful result of the benefit that a worker’s labour has given to both the employer and society as a whole.

Nadine Houghton is a GMB union organiser

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