Sunday, 10 November 2013

The misery of the working poor – Dickensian London, sweatshops in Asia and your office.



The people who clean your office (or wherever you spend your working day) are very likely paid less than the Living Wage. They are not starving or homeless, but then neither are others who might evoke your pity - the working poor of Dickensian London or those now working in Asian sweatshops. In all three cases, low wages mean that the workers and their families live miserable, marginalised and precarious existences.

In London alone, almost 750,000 workers are paid less than the Living Wage. They are an invisible army of shop-workers, carers, cleaners and those doing the myriad of other jobs needed to keep the city working. 

According to the Resolution Foundation, there are 4.8 million workers in the UK as a whole earning less than the Living Wage, comprising 20% of the workforce. We rarely hear n our media about the issues of concern to these millions.

The Living Wage is not the same as the Minimum Wage, which is the legal minimum anyone can be paid. This is currently £6.31 per hour for those aged 21 and over and £5.03 an hour for 18 to 20 year olds. In practice, some employers get away with effectively paying even less than this by devices such as making deductions for “expenses” or by imposing zero-hour contracts. 

The Living Wage rate is significantly higher than the Minimum Wage rate. It is £7.65 per hour outside London and £8.80 per hour in London. Every year more employers are voluntarily committing to the Living Wage. Where a Living Wage employer buys in services like cleaning from a contractor, they stipulate that the cleaners must be paid the Living Wage by that contractor.

Last week a document was published by GLA Economics, with a foreword by Boris Johnson, entitled “A Fairer London: the 2013 Living wage in London.”
 
The mayor pays tribute to the hard work of those who “maintain the fabric of our communities and our city 24/7”. He writes that “It is morally right that their contribution is appropriately recognised…This means paying every London employee at least the London Living Wage, which provides the minimum acceptable quality of life for them and their families plus a bit more “for a rainy day”.

The Living Wage is further defined in the GLA Economics document as being what is needed to “achieve an adequate level of warmth and shelter, a healthy palatable diet, social integration and avoidance of chronic stress for earners and their dependents.”  

The GLA document is a dry piece of work. However, a close reading gives as good a picture of the reality of life for the London working poor in 2013 as Charles Dickens’ novels give for the London working poor of the 19th century. 

The document calculates the “Basic Living Costs” for different types of families living in poverty in London e.g. for couples or singles, for those working full-time or part-time, for families with or without children. It then demonstrates that for some families, their weekly income – the Minimum Wage plus some means-tested benefit – falls well short of their “Basic Living Costs” each and every week.

Life for the poor in London has become much tougher in the last 12 months. For those in social housing, their rent has increased by 6.6% and for those in the private rented sector the increase has been between 9.3% and 12%. The increase in the Minimum Wage was only a miserly 12 pence per hour (from £6.19 to £6.31).

As we have no Dickens, we have to consider ourselves what all these figures actually mean in the lives of real people. They mean choosing between heating and eating, visits to food banks and falling into the clutches of companies like Wonga. They also mean lives of unrelenting drudgery, working all hours and being always in arrears, always in debt.

The Living Wage could significantly improve the lives of millions of workers but opponents say that it is a bad idea as it will cost jobs. Precisely the same scaremongering argument was made when the Minimum Wage was introduced in 1998, with the Tory Party leading the fierce opposition. It turned out then to be completely baseless.

It is not proposed that the Living Wage be imposed by law. There will be some businesses that genuinely cannot afford it. However, there are plenty of employers who could afford to pay the Living Wage but prefer not to do so, if they can get away with it – lower wages means, at least in the short term, more profit.

Just because a business can do something to increase profit, does not mean it should do it – that is the justification for sweatshops now and has been for slavery in the past.

In any event, Boris Johnson argues that paying the Living Wage is actually in the interest of employers. Even the hard-nosed City of London Corporation agrees. Roger Chadwick, finance committee chairman has said, “(The Corporation) believes that the additional cost (of insisting contractors pay the Living Wage) is outweighed by the demonstrable benefits in terms of staff morale, recruitment and retention.”

In London, City Hall and many councils are Living Wage employers. Within the last year, the first department in Whitehall has signed up. This breakthrough – at the Department for Work and Pensions - was achieved when over 60 cleaners signed a letter calling for a Living Wage and left it on the desk of Iain Duncan Smith. 

The idea of the Living Wage has support across the political spectrum. Its two leading political champions are Ed Miliband and Boris Johnson. 

Here is a list of the benefits of introducing the Living Wage

  •  For the workers, it would enable them to have a decent life and improve the life-chances of their children

  • For the employer, there will be a happier, less tired, more productive and more loyal workforce. Also, they can use paying the Living Wage as a marketing tool like Fair-trade and will not have to worry about reputational damage through not paying it

  • For the economy, more money in the pockets of poorer people means more money spent in local shops (more money in the pockets of the rich tends to sit in their bank)
  • For the tax-payer, there will be a substantial saving as presently Minimum Wage levels are topped up by benefits so, in effect, the employer is being subsidised. The Institute for Fiscal Studies has calculated that for every pound spent on the Living Wage, the Treasury saves 50 pence

  • This would reward “hard-working people, who do the right thing” and will “make work pay” – two oft-repeated slogans of politicians of all parties

  • This would be morally the right thing to do and would create a fairer, more decent society.

If you shudder at the misery of Dickens’ working poor, if you don’t buy t-shirts because they were made in Asian sweatshops, then you should support a Living Wage here in the UK. The best place to start may be your own office - just have a quiet word with the boss.


2 comments:

  1. "It is not proposed that the Living Wage be imposed by law. There will be some businesses that genuinely cannot afford it." This is nonsense.

    The Living Wage is higher than the Minimum Wage and being a Living Wage Payer is a PR badge, which will be paid for easily under the PR budget of the firms concerned. Please get back to the matter in hand: raising the minimum wage.

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