From the TUC

The living wage: good business or good PR, home and away?

09 Nov 2014, by in International

As Living Wage Week 2014 comes to an end, I’ve been reading what some of the many blogs have been saying about why employers should start paying it, in the UK and abroad. The three main reasons seem to be PR, the bottom line and collective bargaining.

They’re all linked, of course. Unions want better wages because they make our members’ lives better. But employers aren’t coughing up for altruistic reasons. And of course there is a reason for governments to favour living wages here in the UK and in poorer countries alike: lower necessity to pay in-work benefits and higher, more sustainable taxes.

Wherever in the world the pressure for living wages occurs, those reasons are all found. Companies in the UK need to demonstrate that they are good employers to work for, but they also need to persuade UK consumers that they treat workers in their global supply chains well. And the bottom line – improved productivity, reduced staff turnover- is the same at every stage of those supply chains. Global trade unionism means that unions are adopting similar bargaining strategies whatever the stage of development of the country, and along those supply chains.

Sabita Banerji of the Ethical Trading Initiative, which has made paying a living wage part of its Base Code, and this month signed up to be a Living Wage employer in the UK, had a look at the recent online profile of the issue. She noted that there was far more noise about the issue in the UK and USA, rather than in the poorest countries where living wages are arguably more needed. She also emphasised in another blog the pressure corporates were applying in Cambodia in favour of a higher minimum wage, although it’s more often trade unions who bargain for wages that are high enough for people to live on comfortably.

Whatever the reason for paying the living wage, the pressure on employers here and abroad is mounting. Just don’t expect it to happen without trade unions.