ec lccge living wages debate 27 08 09

8/14/2019 EC LCCGE Living Wages Debate 27 08 09

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Living Wages

Sue Konzelmann, Director LCCGE, [email protected] Webb, Ethical Corporation, [email protected]

Pam Muckosy, Ethical Corporation, [email protected]

Seminar on Living WagesBirkbeck, 27 August 2009



Living Wages

A living wage is ‘a wage that achievesan adequate level of warmth andshelter, a healthy palatable diet,

social integration and avoidance of chronic stress for earners and theirdependents.’

(Family Budget Unit 2009)



Living Wages

Historical Roots

Early history•Rerum Novarum (1891)•Turn of century legislative reform

movement•Quadragesimo Anno (1931)

Modern living wage movement•Baltimore Living Wage Act (1994)•London Living Wage Campaign (2001)

•London Living Wage Unit (2004)



Living Wages

Poverty threshold wage: £6.65

Average (rounded to nearest 5 pence) of•Basic Living Cost Approach: the wage required to meet a ‘low cost butacceptable’ budget for a typical family (£6.45)•Distribution of Income Approach: 60% of median hourly wage (£6.80)

London Living Wage: £7.60Add 15% to un-rounded poverty threshold wage

Percent of GLA workers earning below

various wage levelsEarnings per hour: Full-time Part-time Full & P-time

National Minimum wage £5.73 10 %

Poverty Threshold wage £6.65 10 % 37 % 15 %London Living Wage £7.60 15 % 47 % 20 %

Source: Guardian.co.uk 22 May 2009

London Wage Unit Calculation & Current Figures



Living Wages

Living Wage Employer Award

• The Living Wage Employer Award recognizesethical employment and ethical procurementpractice

• All staff must be:– paid at least the Living Wage

– Eligible for at least 20 days paid holiday a

year plus bank holidays– Eligible for at least 10 days sick leave a year

– Allowed free access to a trade union



Living Wages

The Critics

• A wage floor is harmful to low wage workers,employers and society as a whole

– Low wage workers become unattractive to

potential employers– Increased cost of living reduces buying power of low wage earners, leaving them no better off

– Costs of production, inefficiency and inflation arealso increased

• There are less disruptive ways of delivering

income to the poor



Living Wages

The Proponents

• The academic literature:– Living wage provisions are not found to be associated

with job losses or worker displacement

– There is evidence of productivity increases

– Increased cost pressure provides incentives for firms toseek efficiency and cost savings elsewhere

• London Economics Study (2009)– Benefits: recruitment & retention, absenteeism & sick

leave, productivity, morale & motivation, reputation,employee financial & welfare benefits, workplace change

– ‘There is a real business case for organizations toimplement the London Living Wage.’ (p. 4)



Living Wages

For the Debate

•Whose responsibility is it to make sure thatworking people make a decent living?

•How much is enough?



Living Wages

EC Findings – the Issues

•Tangible action

•Supply chains or living wages?

•Blame governments or employers?

•Wage levels are always on the campaigner/trade union

agenda

•No consistent definition

•Inconsistent application

•Labour union-NGO tension

•Who should bear the added cost?

•Ignores agricultural and informal sectors

•Wages set by global (not national) D & S of labour



Living Wages

EC Findings – the Players

Employers: supplier codes of conduct, job security,

decent hours, safe working conditions, training & development, & contribution to the local economy.

Government: social security, minimum wage,

supporting select industries, defining and mandating aliving wage.

NGOs: research, campaigns, translate the local context& define living wages, & provide a platform fordiscussion.

Unions: collective power, negotiations, & keep thedebate going.



Living Wages

Dozens of definitions & methods for measuring & transferring income. Just a few…

Decent work

Forms of capital

Livelihoods

LED & VCA & Inclusive growth

Direct transfersAccess

Basic needs

Vulnerability



Living Wages

EC Findings - What’s ahead?

-Adjusted cost of living used for relocated managers

-Research and plan for smaller margins

-Campaign or legislate retailers

-Government use of an inclusive tri-partite process

-Campaign & work with employers to implement living

wage-FLA wage ladder

-Integrate living wage into a social audit



Living Wages

Your views…

•Whose responsibility is it to make sure thatworking people make a decent living?

•How much is enough?



Living Wages

You are invited to join our nextdebate on 25 September 2009

This debate will be basedon research by Ethical

Corporation.

‘How to embed corporate

responsibility acrossdifferent parts of yourcompany’

ec lccge living wages debate 27 08 09

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