THE BLOG

The Rate Is Up, But Far Too Few Are Being Paid the Living Wage

03/11/2014 09:35 GMT | Updated 02/01/2015 10:59 GMT

This week's increase in the Living Wage is almost certain to be welcome news for people who get it.

But amidst all the fanfare and celebration about the new rate, we should be thinking about the millions at work who don't receive the Living Wage - and how measures can be put in place so that they benefit too. This is a growing challenge. Recently released figures show that the number who don't get the Living Wage is increasing, with 5.2million now officially classified as low paid, earning below two thirds of the median. That's about one in five of the workforce.

There are low paid jobs in many parts of the economy. In the public services alone we estimate that as many as one million are forced to live with the scandal and consequences of low pay. About half of these are directly employed, mostly in local government. Many will be women, often caring for the most vulnerable in our society. A large number will, out of necessity, have more than one job. The other half are delivering important services such as social care but are employed by private companies or community and voluntary sector organisations because their jobs have been outsourced. In many cases, government budget cuts and illegal non payment of travel time between patients result in these employees not even getting the National Minimum Wage, let alone the Living Wage.

The fact that there are so many who aren't covered by the living wage is inevitable under the current voluntary scheme, in which employers have a choice about whether or not to pay it. The Living Wage Commission estimated earlier in the year that only around 45,500 low paid employees had so far been brought up to a Living Wage by accredited firms, committing to paying the rate to both directly employed and sub-contracted staff.

This isn't about firms not being able to afford it either. Of course there are small businesses and start-ups that would struggle, and need help and time to plan. But they are only a small a part of the picture. The current low pay problem in the UK is more to do with the logic of an amoral flexible labour market. Work by Share Action shows that even among the massively wealthy FTSE 100, fewer than one in five have so far fully signed up to become accredited living wage employers.

So what's got to happen? We say all must get at least a Living Wage. How do we get there? Here are three measures to set us on the right path.

First, the government should to set a target date for when all will be in receipt of at least the Living Wage. A number of different politicians and commentators have begun to call for clearer targets on tackling low pay - reducing the number of those classified as low paid to the OECD average, raising the NMW to a percentage of the median, increasing the number on the Living Wage by one million. Well, why not go the whole way? As numerous studies and commissions have shown, this would be good for the economy, for public finances and, most importantly, those no longer on poverty pay.

Second, government need to recognise the role of public service leadership in tackling low pay. In its final report in June the Living Wage Commission recommended that government should commit to ensuring that all directly employed public sector staff are paid a Living Wage. This is surely right, for how can the government expect other employers to pay up, if it hasn't put its own house in order? There are already good examples of local authorities that have started paying the Living Wage to their lowest paid staff. But whilst this all pushes us in the right direction, it also has to be acknowledged that public procurement has to be part of the picture too. Its no good saying that the directly employed should get the Living Wage at the same time as playing the outsourcing game.

Third, employers who do not pay at least the Living Wage, especially those who are turning a decent profit, need to wake up to the growing public outrage that so many among our workforce are expected to exist on poverty pay. Its time they started listening to their employees, the Citizens movements and community campaigners, shareholders (where they have them) and the growing number who recognise that now is the right time to deliver a Living Wage for all.

Dave Prentis is the general secretary of Unison

shareaction.org/justpay