More than a Number: Calculating the Living Wage

The Living Wage seems to be everywhere at the moment. Peter Kelly, co-chair of the Scottish Living Wage Campaign, argues that this is precisely the time to be clear about what the Living Wage is, and how it is calculated.

Demonstrating for decent pay, Glasgow, October 2014

Demonstrating for decent pay, Glasgow, October 2014

Few campaigns for social justice have managed to secure the profile that the Living Wage movement has attained over recent years. If you want to get a sense of how central the Living Wage has become to discussions about social justice, then set up a Google alert for ‘living wage Scotland’ (Google are an accredited Living Wage employer, by the way!). It may not be scientific, but you’ll get a notification almost every day telling you that the Living Wage is being discussed in the media somewhere. Alongside the constant media attention, there is also pretty much cross party endorsement for the Living Wage and public support for the idea of is very high.

It is not just in the profile of issues related to low pay and social justice or the political consensus that we have seen change in the last few years. Practical changes are being made through the Living Wage campaign: there are almost 1,300 accredited Living Wage employers across the UK, more than 140 in Scotland. Thousands of workers are benefiting from this campaign by getting a pay uplift to £7.85 an hour. This is a good start, but considering the scale of the problem, with more than 400,000 workers paid less than the Living Wage in Scotland, there is a need to go much further and faster. The question is how best to make that progress.

Of course, this progress hasn’t happened by accident. What now seems like a simple and straightforward idea, one that obviously no one could oppose, was not so uncontroversial only a few years ago. When we launched the Scottish Living Wage Campaign in 2007 alongside the STUC and Church of Scotland, there was hardly a queue of politicians and business leaders waiting to endorse the Living Wage (although there was plenty of community activists who were more than happy to do so). This was hardly surprising – back then we weren’t able to say what the living wage was, let alone who was or wasn’t paying it.

A key breakthrough came when the Living Wage Foundation was set up in 2011. The Foundation began working to get some coherence and consistency amongst those campaigning against in-work poverty. One of the concerns that the Foundation had, shared by the Scottish Living Wage Campaign, was the potential for the proliferation of a range of ‘living wages’.

As local campaigns emerged, which was a good and desirable thing, there was a danger that we would see a fragmented and unclear notion of the living wage. Would it really be helpful if the ‘Glasgow living wage’ was £7 an hour, and the ‘Edinburgh living wage’ was £7.50 or the Aberdeen living wage was £8 an hour? Did we really want to see different living wage rates in Liverpool, Oxford and Brighton? There may well be some variations in cost of living between some of these places, but could such variations be used to justify variations in the living wage?

The campaign in Scotland took an early decision to have a single rate without any regional variations. The experience of campaigners in the United States, where there was a wide range of localized living wage campaigns with different ways of calculating the rate, different groups that it applied to and different times when it would be uprated, is instructive. There has been progress in some areas, but the Living Wage in the US has not made the progress that would have been expected (campaigns there pre-date the UK campaigns).  One of the problems that a fragmented campaigns such as have developed in the US have, with multiple demands for slightly different levels of Living Wage, is that employer’s who want to do the right thing, are not clear which ‘living wage’ they should pay. Those who may be already be reluctant to commit will have another excuse not to bother.

So after a number of meetings between campaigners across the UK in 2010 and 2011 it was agreed that a consistent approach to setting the living wage would be adopted.  With the Minimum Income Standard as the basis of the approach to calculating the figure there would be a clear and consistent methodology for calculating the living wage. This would allow campaigners to justify why they were calling for a particular figure, that it was a figure based on an assessment of need and not simply plucked out of the air. It is upon this basis that we come to the current figure for 2014-15 of £7.85 an hour. In our engagement with employers as part of the Scottish Living Wage Accreditation Initiative it has been clear that the credibility of the method of calculation is one of the key factors in encouraging employers to commit to the Living Wage.

Staff at Utopia Computers are paid at least £7.85 an hour

Staff at Utopia Computers are paid at least £7.85 an hour

As the campaign continues to grow, and more employers become  Living Wage, it becomes all the more important to maintain a clear and consistent approach to setting the level of the living wage. It is understandable that some campaigners want to raise the demand for £10 or £15 an hour, or want to have their own ‘local’ living wage. We certainly wouldn’t say that the current level of the living wage is the limit of our ambition. Groups of workers will always come together to fight for better pay.

However, campaigners need to remember that the Living Wage in the UK has developed as something quite distinct. With a long history of development, a clear methodology, a recognition scheme for those who fully commit to pay and regular uprating, the Living Wage is now very clear demand. This clarity is our strength. Maintaining that clarity and unity is a priority for the Scottish Living Wage Campaign, and should be all those campaigning against low pay. That clarity has made the Living Wage movement across the UK the success, and it is that clarity that provides the basis upon which we can make further progress in the fight against low pay and in-work poverty.

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