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Paying the Living Wage: How Transparency Makes It Happen

In my last blog, I wrote about how the minimum wage should be legally increased to living wage levels. Since then, the living wage has remained on my mind - not least because the Equality and Human Rights Commission has released The Invisible Workforce, a report on employment practices in the cleaning industry which found low pay is the biggest issue for workers. I've also been following the TUC's campaign, Britain Needs a Pay Rise, and I've been encouraged to see Bank of England Governor Mark Carney speak at the their conference this month, backing the living wage. Clearly it is steadily gaining support.

Hopefully, one day workers and responsible employers alike will be celebrating the living wage being law - but there's lots to be doing in the meantime. Campaigns should increase their focus on businesses to persuade more companies to get on board, such as the work the Living Wage Foundation are doing to accredit employers. In my industry, that's not easy - the EHRC report echoes a lot of what I've experienced with my company The Clean Space, for example the fact that decisions on pay rest with clients, who often put pressure on cleaning companies to cut costs and pick cheaper minimum wage contracts over the more expensive living wage version.

However, I've also had experiences that give me great optimism. Recently I was negotiating the renewal of a contract with a client who had always been focused on cost. In this negotiation, however, I had been completely transparent about where the cash from their monthly invoice was distributed - including the pay rates of his cleaners. Seeing this information had a dramatic effect. He chose to pay more for our services, but only on the proviso that the extra money go to the cleaners - of course we agreed, and we have committed to sharing copies of the cleaners' payslips (with their permission of course) to continue that transparent arrangement. As a result of being upfront about cleaners' pay, the client was engaged in a way I haven't seen before and immediately took control - it was a great feeling for me, but the people who benefit most are our cleaners.

This is an important example of what's possible. It illustrates the reality of cleaning contracts and implementing the living wage, but it also shows how useful transparency is in prompting people to consider issues like pay and do the right thing. The EHRC report found that clients will often agree to pay for the living wage once a good business relationship has been established with a cleaning company, and good relationships can only flourish with increased transparency. Giving detailed tenders with pay information is something that must happen more in my industry - the EHRC recommend giving a living wage bid as good practice and the Living Wage Foundation even has special accreditation for contractors who choose to do it.

I believe the same honest approach will work with consumers. A recent survey by KPMG found over half of those asked would pay more for products and services if the money was going to employees. 40% of consumers would also switch their loyalty to another company if their favourite brand didn't pay a living wage. Those who stated that they didn't care about staff pay when shopping were in a distinct minority of 13%. These findings are heartening, and I believe the more people get to know who pays a living wage, the more they'll vote with their wallet. That's why the Living Wage Foundation's employer list is so crucial - it's an easily recognisable way for businesses to attract service providers, consumers and prospective employees alike, and the June report from the Living Wage Commission (PDF) agrees this is necessary to raise awareness.

This brings us back to transparency, as people can only become aware if pay practices are out in the open. We need to have an honest conversation about the realities of implementing the living wage, with businesses and consumers involved just as much as government. People should be encouraged to do the right thing - my experience is that many want to. The TUC rally in October is an opportunity for this to happen, as is Living Wage Week, which takes place from November 3rd. It's a good time to ask yourself what you can do to support the living wage; perhaps read up on the business benefits, one of which is staff morale, an important subject that I plan to tackle next time. Or find out which companies pay a living wage and choose where you'll spend your own hard-earned cash. Whatever you do, let's make sure we keep talking and working towards fairer pay for everyone.

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