The living wage: a basic necessity?

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Campaigners in Daventry held a march in Bowen Square from 10.30am on Saturday to mark the end of Living Wage Week.

The new rate of the living wage was announced on Monday, November 3, at £7.85 per hour outside of London, an increase of 2.6 per cent on the 2013 rate and 21 per cent higher than the national minimum wage of £6.50 per hour.

The living wage is based on the amount an individual needs to earn to cover the basic costs of living, with different rates for London and the rest of the UK.

Currently, around 1,000 businesses across the UK pay their low paid workers a living wage. In Daventry, campaigners hope the march will spark a debate between residents and local business on the issue. Currently 21 per cent of working people in the Daventry constituency are paid below the living wage.

Cllr Wendy Randall is one of the organisers of the event.

She argues the minimum wage is simply not enough for ordinary people to support themselves and their families.

She said: “When the minimum wage was brought in it was to help people out of poverty. Now the minimum wage is a standard that is not fair.

“There is research to show that when people feel valued and appreciated their productivity improves and they take less sick days.”

Cllr Randall said because people on minimum wage have to claim benefits to supplement their incomes, the British taxpayer was effectively footing some of the wage bill for some businesses. She said: “Most people would rather go to work, get their wages and not have to bother about getting benefits. We welcome local businesses to speak on our soap box. It would be great if some local businesses that pay the living wage could come forward.”

In Daventry, businesses signed up to the living wage include Daventry and District Housing and Kuni’s Coffee and Comics.

Bryan Cooney opened Kuni’s Coffee and Comics in Daventry in December last year.

He said paying the living wage to his employees has been enshrined in his business practice since the start:

He said: “When we sat down to set up our business we decided to be a living wage provider. For me it is a matter of ethics. It is a case of people liking to know they are valued. If you pay people a fair wage they work harder and believe in the business.”

Mr Cooney said since he opened his business he has lost only one full time member of staff, and has seen other benefits too. He added: “There is also a cost reward. The living wage saves money and it gives customer a good customer experience. I don’t believe the minimum wage is keeping up with reality. I just think it is ethically right to pay people the living wage.”

In 2013 DDC rejected a proposal to become a living wage employer over worries the wage boost would disrupt the payscale, potentially leading to an increase in the wage bill of more than £500,000.

Cllr Chris Over, DDC’s economic, regeneration and employment portfolio holder, said to his knowledge DDC had no plans to force businesses to pay the living wage:

He said: “From a personal point of view we would all want people to be reasonably well paid. But businesses are personal matters. We have just come out of a difficult period that has impacted on businesses and people for some time. My hope would be to see – as we come out of this difficult period as companies and businesses become more prosperous – wages would be adjusted.”

But while campaigners argue a living wage would effect substantial difference on the lives of Britain’s lowest paid workers, Anne Bamfield, manager at Citizen’s Advice Daventry & District, said the issue is more complex than a case of workers not being paid enough, and irrespective of their wage amount, some people live outside their means because they are unable to budget effectively.

She said: “Some people can live very adequately on the minimum wage. It very much depends on the person, but it is up to people to cut their cloth to fit. Some people think once they are working they should be able to by anything they want. There is also a problem in Daventry in that there are a number of employers offering zero-hour contracts. We get people coming to saying one week they are working 40 hours before next week being told there is no work available. It is causing serious difficulty for a lot of people.”

Whether you believe in a prescribed living wage or feel that businesses should keep autonomy over how much they pay their workers, it is undeniable that many minimum wage workers, particularly those on lower pay and zero hours contracts, are turning to the state for help.

Depending on how much they earn and how many hours they are contracted to do, minimum wage earners may be eligible for a number of benefits, including Working Tax Credit, Housing Benefit, Council Tax Benefit and child support. Proponents of the living wage say that if companies which make enough money to do so upped their wage levels, the national benefits bill would fall. In 2011/2012 Government figures show the UK benefits and pensions bill was £159 billion. Of that 21 per cent (£34.14 billion) was paid out in Housing Benefit, income support, rent rebates, and Council Tax Benefit, compared to £4.91 billion in Jobseekers Allowance.