By Calum Carson, Doctoral researcher at Leeds University Business School
As Challenge Poverty Week continues, it’s time to talk about an aspect of combating poverty in Scotland that can have immediate, important effects: by the boosting of incomes to levels which enable workers to afford a decent standard of living and participate fully in society, through being paid a real Living Wage. This week is also a good time to celebrate those campaigning for a Living Wage for Scottish workers and the more than one thousand employers in Scotland who voluntarily pay it, and enjoy the additional business benefits to their organisations of doing so.
But first, a bit of background. The Living Wage is a higher rate of pay than the legal minimum wage rates of £7.38 an hour for under 25’s and £7.83 for over 25’s under the “National Living Wage”, set instead at £8.75 an hour and £10.20 in London to better reflect the high cost of living in Britain today. These rates are independently calculated and are designed to ensure that those being paid the Living Wage are protected from experiencing the effects of in-work poverty, and are increased each year to ensure that they keep up with rising prices and bills.
As this week’s new Joseph Rowntree Foundation report shows, challenging low wages and recognising the importance to workers of being paid a Living Wage is essential in combating poverty in Scotland. The report finds that on average the majority of children in poverty in Scotland today have at least one adult in their household in work, and that in 2018 in-work poverty in Scotland has grown to the highest rate seen since the turn of the century, challenging the argument that employment alone is enough to avoid being in poverty: higher wages are also needed.
Since 2014 Living Wage Scotland have been highlighting the importance of employers paying a Living Wage to their workers, and the central importance of this in challenging poverty rates in Scotland. Employers who pay it are publicly recognised and celebrated for their commitment to ensuring that their workforces are not in poverty, and are rightfully proud of their voluntary efforts in going above and beyond the legal minimum in respecting and protecting their employees. In just four years the number of organisations paying it is over 1,200 and rising, a testament to both the campaign itself and the level of passion there is from Scottish employers for challenging current in-work poverty rates.
Organisations who have become accredited Living Wage Employers in Scotland hail from all sectors of the economy, ranging from large multi-site firms to small whisky distilleries, and from the public, private, and third sectors. Employers talk of paying the Living Wage as a “sign of respect” to its employees so that they can “afford to live”, and a belief that businesses have a responsibility to ensure that their workers are paid appropriately.
It is not only workers that benefit from a Living Wage, however, but those that employ them too. Testimony from employers who have become Living Wage Employers have drawn attention to the sometimes unexpected business benefits that result from raising their worker’s wages to Living Wage rates, ranging from boosts to their public image to falls in retention and rises in the quality of candidates at interview stage: the Aberdeen-based brewery Brewdog, for example, saw staff turnover on their retail sites fall 40 per cent upon accreditation. Recent research from Cardiff University reinforced these insights, with an overwhelming 93 per cent of employers reporting business benefits from paying a Living Wage to their employees. Paying the Living Wage, then, can be said to make both moral and business sense.
This year the first Living Wage Scotland Awards will be held, to ensure that the invaluable contributions of Living Wage Employers in Scotland are publicly recognised and celebrated as widely as possible. Individual employers have an important role to play in challenging and combating poverty across Scotland, and paying the Living Wage is a vital aspect of that. To all employers reading this and considering becoming accredited, do please get in touch with Living Wage Scotland here.