Minimum isn’t enough

The Scottish Living Wage Campaign has been in existence for nearly two years and is now beginning to have a real impact. In this article Peter Kelly looks at what has been achieved and how the campaign can continue to grow even in recession.

Times are tough for those of us fighting poverty and inequality. This seems like a statement of the blindingly obvious given the facts: unemployment stands at almost 2.5 million in the UK, homelessness is starting to creep up again, four million households live in fuel poverty and that is expected to increase dramatically over the next two years, the numbers facing serious problems because of debt is at crisis levels, public spending looks set to be slashed over the coming years and, to top it all, the benefits system is about to go through another round of reforms that will make access to social protection even more of a privilege than a basic right. Tough times indeed, particularly if you are unfortunate enough to find yourself out of work and needing support over the next couple of years.

So in the midst of the longest recession since the 1950s, what are the prospects for the coalition of anti-poverty campaigners, trade unions and faith groups that are behind the Scottish Living Wage Campaign? It’s arguable that the conditions for building such a campaign have never been worse, but recent evidence would suggest that real progress can be made despite the economic context. What is more, the living wage campaigns that have developed all across the UK have the potential to build solidarity within working class communities and to ensure that social justice is not left off the political agenda until the economy recovers. For many campaigners, the living wage is not simply about getting some much-needed extra cash into the pockets of low paid workers, it is also about injecting some justice into one of the most unequal societies in Europe.

Campaigning against low pay is, of course, not a new phenomenon. ‘A fair days wage for a fairs days work’ has been a rallying call of the international trade union movement for over 100 years. It is largely due to the work of the trade unions that the problem of low pay in the UK is not even worse than it is at the moment. But campaigners against poverty and inequality have long recognised that collective bargaining will not improve the wages of those who are not covered, and that very often these have been the lowest paid workers. The establishment of the Low Pay Unit in London in the mid 1970s and the creation of a network of Low Pay Units, including the Scottish Low Pay Unit, was an acknowledgement that a different approach was required. In many ways the Scottish Living Wage Campaign builds on the tradition that the Low Pay Units’ represented, bringing together a wide range of organisations, including trade unions, to make the case for more protection of the lowest paid and to see this as a crucial element in addressing poverty and wider economic inequalities. But living wage campaigns in the UK have also drawn inspiration for the United States, where the approach has differed in crucial ways.

Living wage campaigns in the US have utilised the long experience there of community organising. There are many different styles and approaches to community organising in the US but something that unites them all is that they attempt to bring together diverse communities to work for progressive social change. This can include faith-based organisations, trade unionists, community organisations, and, of course, low paid workers themselves. Campaigns across the US have forced city councils to introduce living wage ordinances that have required any firm receiving public money from the state to offer rates above the existing federal or state minimum wage. By building broad-based coalitions these campaigns have not only tried to improve incomes, but have also challenged the way that power is distributed and used.

Whether in the UK or in the US, there is a recognition in all living wage campaigns that the legal minimum wage is not sufficient to lift all workers out of poverty. Despite the introduction of the national minimum wage in the UK, it is estimated at around 20 per cent of workers are low paid, and prior to the start of this recession around half of poor children lived in a households where there was an adult in work. This is not to deny the importance of minimum wage legislation; it has boosted the pay of millions of workers in the UK, and has protected many from outright exploitation. Living wage campaigners would also support increases in the minimum wage and moves to ensure that it was properly enforced. But the combination of tax credits and a low minimum wage has not been enough to secure an adequate income for thousands of workers across the UK. In the context of the booming economy and increasing employment growth that was experienced from the mid 1990s until recently, it was easy for some policy-makers and politicians to believe that they had done all that was needed to ‘make work pay’.

But organisations working with communities, whether they were faith groups, trade unions, voluntary organisations could see that many people were simply exchanging the hardship of the benefits system, for the difficulty of making ends meet in the world of deregulated flexible labour market. The experience for many people working in low paid employment is not simply that of poverty, but it is also the lack of dignity, respect and power that comes with a low paid job. Furthermore, tax credits have in many ways become an effective subsidy that allows big business’ to pay just above the minimum wage, regardless of their ability to pay more.

Campaigners for living wages have recognised this experience and the campaigns that have developed in the UK, whilst all different, have sought to ensure that they not only deliver improved pay but also begin to afford low paid workers the dignity and respect they deserve. To date the most significant campaign for living wages has been that led by London Citizens, a coalition of grassroots organisations, faith groups, schools, trade unions, and others. By building a vibrant and active coalition they have scored some notable successes, including winning the living wage for cleaners in HSBC Bank and Barclays at Canary Wharf, securing a compact with the Olympic Games Authority to ensure that the 2012 Games pay the living wage, getting Ken Livingston to set up a Living Wage Unit within the Greater London Authority (GLA). Partly inspired by these successes, the Scottish Living Wage Campaign (SLWC) has been working together since the end of 2007. Much of the first year of activity was spent building the case for the living wage and carrying out the necessary task of establishing the level of the Scottish living wage. These were time consuming tasks, but necessary to establish credibility. Basing our calculations on the Joseph Rowntree Foundation’s Minimum Income Standard, we arrived at the figure of £7 an hour for 2009-10. There is no denying that this is a modest target for the living wage in Scotland; for a full time 35 hour job this would provide an annual salary of just over £12,700. But it should be remembered that this is still £2,000 more than would be received on the minimum wage.

Now that the figure has been set, we have started to see real movement in the campaign for a living wage in Scotland. In April this year we made the first Scottish Living Wage Employer award. This was given to Glasgow City Council in recognition of the fact that they have decided to pay all their staff at least £7 an hour. This was an important step forward for the campaign, particularly as around 20 per cent of workers employed directly by the state are paid less than £7 an hour. Having the largest local authority commit to the living wage was also symbolic of the important role that the public sector can play in leading the way in tackling low pay. Glasgow has wholeheartedly adopted the idea of the living wage, going as far as to launch their own Glasgow Living Wage Employer award. This was launched in October and so far more than 110 organisations, many of them in the private sector, have been given the award. It will be important to see how this new Glasgow award is monitored and how it will apply to workers who are subcontracted by companies, particularly cleaning, security and catering staff. But there is little doubt that Glasgow’s approach has put the issue of low pay in the public sector firmly on the agenda.

The role of the public sector in setting the standard in local economies will become increasingly important during the recession. It is important that more local authorities commit to the living wage as part of a programme of activity to protect the poorest during and after the current recession. This will be challenging given the state of public sector finances, and the cuts that we can expect to see for the coming period. The initial signs outside of Glasgow do not look entirely encouraging; both Edinburgh City Council and West Dunbartonshire Council have recently rejected the possibility of a living wage for their own employees. The Scottish Government has also been lukewarm about the possibility of ensuring that all NHS staff in Scotland are paid the living wage. A report due out at the end of 2009 should clarify the Scottish Government’s approach to paying the living wage. The SLWC has also been in discussions with other public sector employers, and we are encouraged that despite the reservations of some in the public sector, others see the wider benefits of paying a decent wage to their staff. However, the living wage will not have its biggest impact in the public sector. It is the private sector where the real problem of low pay exists in Scotland; just under 70 per cent of workers in hotels and restaurants and around 60 per cent in retail and wholesale were paid less than £7 an hour in March 2009. The challenge for the SLWC is how to have a bigger impact on these sectors of the economy.

Central to making a bigger impact on the private sector will be the greater involvement of local community activist and local trade unionists in the campaign. Work is already underway in North Edinburgh to build up a local coalition of groups that can put pressure on the large retail employers in the area. The STUC’s Scottish One Fund for All has made funds available to help local groups get organised to take action to support the living wage in their area. These are currently small steps, and more resources need to be found to ensure that the campaign can have the impact that is required. But there is little doubt about the need for this campaign, and the potential for it to bring together the kind of broad based coalition that is required to push for greater social and economic justice in these tough times.

To find out more about the Scottish Living Wage campaign visit: www.povertyalliance.org/scottishlivingwage
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