Guest blog by James Kelly MSP on Living Wage Week

The Living Wage is best for Business

Living wage week is a good opportunity to look back at how the living wage has developed in the last year, and what campaigners can do to take the case for better, fairer pay forward.

Earlier this year I proposed amendments to legislation which would have seen low paid workers on public contracts guaranteed the living wage, delivering a pay rise of over £2,000 to a full time minimum wage worker Scotland has track record on the living wage to be proud of, particularly in the public sector. However it is undermined when a civil servant on a salary band far above the living wage is guaranteed it, when a cleaner whose job was outsourced to a private company by a public body is not.

Unfortunately my attempts to close this low pay loophole were unsuccessful on that occasion. However, I belive it is the direction we should look towards to further extend the living wage – the private sector.

That is why I wrote to Celtic earlier this month backing a fan led campaign for them to become a living wage employer, and why I congratulate Heart of Midlothian for becoming the first senior football club in the UK to pay the living wage.
These football clubs are ultimately both businesses, and also iconic brands, by paying the living wage they can effectively promote it in a way the public sector cannot.

As a member of the Labour Party I of course back better and fairer wages. I want to tackle working poverty by focusing on promoting the living wage where it will make a difference: in low paid professions.
But I believe it is vital that the Scottish public do not see the living wage as some sort of charity measure. It makes economic and business sense for employers to pay it.

Major employers such as KPMG pay the living wage to both their directly employed and crucially their contracted staff. The results of doing so are overwhelmingly positive for the company. Absenteeism has gone down whilst performance and morale have gone up.

KPMG report that turnover amongst contracted cleaning staff has more than halved since paying the living wage, which in turn will lower administration costs.

I applaud KPMG for being so vocal in their backing of the living wage. We now have over 900 accredited living wage employers across the UK with over 40 in Scotland. Those are promising figures but with over 800,000 Scots living in low income households we can and must do more.

The living wage makes social, moral and economic sense. It is vital that as we continue to campaign for it’s extension that we do not undersell that final point. It is a smart business decision for employers to take.

For my part, I will continue to make the case to employers in Scotland that better pay means better results, so we can build a better economy for everyone in Scotland.

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