Skip to main content

Neil Jameson on the importance of pay reflecting the cost of living

The Chancellor’s announcement in the Summer Budget that he will introduce a higher minimum wage for over 25 year olds was a milestone for Citizen UK’s 15-year campaign for a Living Wage and an important win for millions of low paid workers across the country.

The campaign for a Living Wage began in 2001, when Citizens UK brought together communities in East London to discuss what changes would improve their lives. Parents spoke of the hardship they faced working for poverty wages, many of them working two jobs and still struggling to make ends meet. At the time the National Minimum Wage was just £3.70 an hour.

Citizens UK is a coalition of grassroots institutions who began to ask employers who could afford to pay more to pay a wage that reflected the basic cost of living for all workers over 18. The rate, set by independent calculation bodies each year, is currently £8.25 an hour, and £9.40 an hour in London – significantly higher than the current minimum wage, at £6.70, and the new over 25s rate, which is due to kick in at £7.20 in April 2016.

The campaign has been at the forefront of efforts to ensure that the most socially and economically disadvantaged communities are paid a decent wage and have access to secure and meaningful work. The number of Living Wage accredited employers has doubled to more than 2,000 over the past year, and earlier this month we celebrated their leadership in a national week of action and events. They now include more than a quarter of the FTSE-100, household names such as Unilever, ITV, Nationwide, Chelsea FC, KPMG, Oxfam and the Houses of Parliament, and small businesses across many different sectors. The campaign has made strong in-roads into low paying sectors such as cleaning and catering, and in recent months has seen a major breakthrough into retail – with IKEA, Oliver Bonas and Lidl all announcing their decision to go beyond statutory requirements and commit to paying their employees and sub-contracted staff a rate that meets their basic needs.

But with one in five employees on low pay, there is still more to do. The UK has one of the highest rates of low pay in the developed world, and the Government’s proposed changes to the welfare budget mean that living standards could continue to be an issue in the years to come.

Our priorities are to drive more progress among the FTSE-100 and in sectors hiring large numbers of low paid people. The success of the campaign has historically been rooted in the benefits of paying higher wages, including reductions in staff turnover and improvements in staff performance. The Living Wage Foundation – an initiative of Citizens UK set up to promote, accredit and support employers to pay a Living Wage – is currently working with several major retailers to develop new tools to support employers in low paying sectors to move to a Living Wage and maximise the benefits by addressing wider issues such as insecurity, low skills and weak productivity at work.

The future of the campaign will also remain firmly rooted in Citizen UK’s mission to develop civil society’s capacity to take action on issues that matter to them. For many years, people living outside areas where Citizens UK is active have asked us how they can take action on the Living Wage. Earlier this month we launched a new Living Wage People’s Movement to harness that energy by supporting local campaign groups to raise awareness and encourage employers in their towns and cities to pay the recommended Living Wage rates. Our new interactive map of all accredited Living Wage Employers means that, for the first time, people can search for Living Wage employers or products and services in their area.

The pressures disadvantaged communities face have not gone away. As long as low pay and insecurity at work exist, we will continue to push for a Living Wage that reflects the basic cost of living, supports healthy family life, and is the foundation of a modern workforce in the 21st century economy.

Neil Jameson is the Founding Director of Citizens UK. He originally wrote this piece for The future of work edition of Bright Blue’s Centre Write Magazine.