POVERTY campaigners have welcomed today’s rise in the voluntary living wage and urged more Scottish employers to sign up to the scheme.
From today the 380 Scottish firms signed up to a voluntary living wage accreditation scheme will give their lowest paid employees a pay rise of 40p per hour from £7.85 to £8.25.
The £8.25 rate figure is almost a fifth higher than the existing national minimum wage, set by the UK Government of £6.70 an hour, and over £1 more than Chancellor George Osborne’s new “living wage” wage for over-25s of £7.20 an hour that comes into force in April.
Glasgow University is the latest employer to join the scheme, taking the Scottish Government-supported Living Wage Foundation a step closer to its goal of 500 accredited firms by March. New research by accountancy firm KPMG, released to coincide with the new rate, shows that Scotland is outperforming the rest of the UK with 80 per cent of workers earning more than the living wage, compared with 77 per cent across the UK.
In April 2014 only 20 companies were signed up to the scheme, a figure that now stands at 280, including big employers such as Standard Life and SSE. The Scottish arm of the Living Wage Foundation hopes this will rise to 500 by March.
However, around 441,000 people in Scotland are still earning less than the living wage. East Renfrewshire is the worst performing area with 32 per cent earning less than £8.25, followed by Angus and Clackmannanshire at 31 per cent.
Speaking at the beginning of Living Wage Week, Peter Kelly, director of the Poverty Alliance, which works in partnership with the Living Wage Foundation, welcomed the increase in the voluntary living wage and urged more employers to pay the rate.
He said: “There has been much debate in recent weeks about how best to address the problems of in-work poverty. We know that paying the living wage is at the heart of the solution.
“Much of the focus of this week will be on voluntary efforts of employers, many of whom are capable of paying more to their employees and should be paying more. The economy slowly recovering – we want more employees to share in that growth.
“The Scottish Government has been very supportive of our efforts to encourage and engage with employers, and we hope this will continue. We would say, however, that the UK Government’s approach of cutting tax credits and hoping wages will rise naturally is flawed.”
Kelly called for more Scottish employers to consider paying the voluntary living wage, adding that it increases productivity among staff. “In the last 18 months we’ve heard clear messages from accredited employers that paying a living wage is beneficial, leading to a reduction in staff turnover, and staff training, and an increase in reliability and productivity. The living wage is an important anti-poverty measure but makes business sense.”
The Westminster Government vows to raise the national minimum wage to £9 per hour by 2020, but this only applies to the over-25s. Mike Kelly, of KPMG said household finances were still being severely squeezed, which meant many of the lowest paid were living “hand-to-mouth”. He added: “The figures show there is still more to be done if we are to eradicate in-work poverty. For some time it was easy for businesses to hide behind the argument that increased wages hit their bottom line, but there is ample evidence to suggest the opposite, in the shape of higher retention and higher productivity.“It may not be possible for every business, but it is certainly not impossible to explore the feasibility of paying the living wage.”
Professor Anton Muscatelli, principal and vice-chancellor of the University of Glasgow, said the university had paid its staff the voluntary minimum wage for some time.: “From May this year we have taken steps to ensure that all casual workers we engage are paid at least the living wage, and we’re keen to remain an exemplar of good practice in the higher education sector.”
The National View: Good news on living wage but there’s more to be done
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