LOCAL authorities in Scotland have been urged to pay the real living wage after a major report found the move could boost the economy by millions of pounds.
Only half of the 32 local authorities have so far signed up for Scottish Living Wage Accreditation which involves a commitment to pay all workers the minimum rate of £8.75 an hour.
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This is based on the cost of living and is higher than the UK Government’s so-called living wage of £7.83 outside London, which is only applicable to workers over the age of 25.
Glasgow is one of the 16 local authorities that have failed to sign up for accreditation but the report by the Smith Foundation revealed that if just a quarter of the city’s lowest paid workers were paid the real living wage, the economy could benefit from a £49 million economic boost.
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It would mean 37,500 people receiving an average annual pay rise of £1180, or an extra £23 a week. At the moment, 150,000 people working in the Glasgow City region are paid below the real living wage.
The increase in wages would also provide a £27m boost to the local economy which could be increased to £49m if half of the £16m tax and benefit dividend to HM Treasury was returned to Glasgow.
The report goes on to highlight the role that leading local public and private sector employers such as universities, hospitals, football clubs and city airports can provide leadership on the living wage.
It recommends they become accredited living wage employers, set clear targets for living wage take-up in their cities and regions and develop a plan with other key local anchor institutions for how these will be met.
The report also points out that local authorities could use their powers of planning and public procurement to encourage more employers to commit to the real living wage, as well as make support for business development and investment in skills contingent on firms paying a fair wage.
“With more than one third of the Scottish workers paid less than the real living wage living in the Glasgow City region, there is much more that needs to be done by local authorities and employers,” said Peter Kelly, director of the Poverty Alliance that hosts Living Wage Scotland.
“Getting more workers paid the real living wage will not only benefit them and their families, but will make for a healthier local economy which will benefit us all. The evidence is here in this report, now it’s time for action.
Paul Hunter, deputy director of the Smith Institute added: “Growth does not have to come through a race to the bottom on wages. The real living wage offers local authority policymakers one way of turning some of the rhetoric around inclusive growth into a reality.”
Accredited councils in Scotland are Aberdeen, Edinburgh, Dumfries and Galloway, Dundee, East Dunbartonshire, Falkirk, Fife, Inverclyde, Midlothian, North Ayrshire, North Lanarkshire, Perth and Kinross, Renfrewshire, South Lanarkshire, Stirling and West Lothian.
The real living wage is supported by the Scottish Government.
Minister for Business Fair Work and Skills, Jamie Hepburn said: “The Scottish Government has long championed Fair Work and paying the real living wage is part of that: It ensures not only that workers are treated more fairly and they get more money in their pockets – it benefits our economy too.”
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