Living wage rises, but will we see the benefits?

Living wage rises, but will we see the benefits?

The Living Wage is a movement, which aims to eradicate poverty through the promotion of higher minimum wages for all workers. The rate itself is calculated based on the true amount people need in order to achieve basic living standards.

Every year in the first week of November, Living Wage Week takes place, which comes with the announcement of the new Living Wage for the year. This year there has been an increase of 20p, with the UK rate now standing at £8.45. Importantly for us as the student population, campaign supporters believe that all workers over 18 should receive at least this amount, as it is recognised that young people face exactly the same living costs as other people.

The Living Wage is not to be confused with George Osborne’s hugely similar sounding National Living Wage, announced in July 2015. This is a minimum wage of £7.20; over £1 lower than what is shown to be needed for decent living standards. Irritatingly, this policy only applies to those over 25, meaning young people and their financial struggles are largely ignored. Clearly, there is a need for further action in order to raise the earnings of the lowest paid workers. This is possible through the Living Wage.

Undoubtedly the Living Wage brings numerous benefits to employees but one must question how it would impact businesses. It is entirely voluntary for employers and currently there are 3000 businesses nationally who have committed to paying the living wage. Supporters of the movement argue that it brings marked benefits for the firm, such as increases in productivity, improvements in the quality of work as well as a reduction in staff turnover. Could this mean more businesses choose to pay us higher wages?

Many businesses on our doorstep here in Yorkshire, have already committed to the movement, with at the moment 147 living wage employers across the county. Leeds Business Improvement District (LeedsBid) is a firm which aims to improve the attractiveness and awareness of the city and at the beginning of the month, they signed up to become our newest living wage employer. They believe their living wage accreditation demonstrates their commitment to being a responsible employer. But can we really expect all businesses to be able to afford this hike in minimum wages?

The Gryphon spoke to everyone’s favourite burger vendor, Get Baked, to ask their views on implementing the Living Wage. They told us how they believe, for businesses in the hospitality industry, paying all staff the Living Wage simply would not be feasible. Large fluctuations in costs and revenue means that having such high wage costs could lead to business failure. Get Baked also said how like many other businesses in hospitality, the majority of their staff work part-time and so the boosts to staff motivation seen through the implementation of the living wage, would not be felt to such an extent as in other industries. Meanwhile, full-time staff tend to have more responsibilities and so receive a higher wage regardless. Unfortunately, it seems very unlikely that businesses such as this would voluntarily opt in to pay the living wage.

As the vast majority of students are only able to work part-time, it is unlikely that our employers would be willing to implement the living wage. This means that unfortunately for us, it looks like we’ll be stuck on the minimum wage for a long while yet.

 

By Alice Green

(Image from centre for independent living)

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