Toward a living wage for all
As we head toward the 2015 general election, we seem to be approaching a critical moment in the evolution of the national minimum wage and the possibilities that it opens up of achieving a living wage for the millions of working people across the UK who are battling week after week to make ends meet.
With opinion polls consistently showing a very clear majority of the public discontent about the scale of inequality afflicting society, even traditional enemies of the national minimum wage have been making noises about significantly higher rates. Chancellor George Osborne claimed at the start of 2014 that he would like to see the adult rate rise to £7 an hour by 2015 and some business leaders recognised that improved growth across the economy should lead to real increases in the rate
As the party that established the national minimum wage, it wasn’t surprising that the Labour Party went further by commissioning the Buckle Report to look at the long term picture and pledging in September that it would raise the rate to £8 an hour by the end of the next Parliament.
However, public service union UNISON believes that the time is now right to steer a very clear path that will take the national minimum wage up to the level of the living. As a down payment, our submission to the Low Pay Commission argues for a rise in the 2015 national minimum wage to £7.18 an hour – that’s the mid-point between the current minimum wage and the living wage.
The urgency of this step is sadly apparent in the ballooning scale of low pay from 3.4 million in 2009 to 5.2 million in 2013 across the UK economy, as well as the startling finding in 2013 that the number of people in working families who are living below the poverty line has actually overtaken the number in workless and retired families.
But statistics can only ever tell part of the story about why the time has come to deliver the basic decency of paying wages that allow people a reasonable quality of life. The Low Pay Commission’s own website is littered with the daily experiences of people whose income is stripped to the bone by the basics of rent, food and energy bills and provides vivid testimony to the enormous stresses that it can place on health and family life.
Unfortunately, concern for the low paid has often crumpled in the face of economists telling us that higher pay costs jobs and the acceptance of those arguments over the long recession has seen inflation erode the value of the minimum wage ever further.
Yet this narrow argument based solely on costs takes little account of the impact on the wider economy and has been thoroughly debunked by economist Howard Reed. His examination of extending the living wage uncovers the huge boost it brings to demand and economic growth, along with the reduced government payout through the benefit and tax credit system in propping up low wages for employers.
UNISON believes that both the moral argument and the economic arguments are clear. Fifteen years on from defeating the fierce opposition that fought the whole principal of a national minimum wage all the way to the statute book, it’s time to seize the opportunity for a step change and establish a minimum that delivers a truly living wage.