May 23rd 2016
Presentation to Lambeth Momentum and Common Knowledge
The introduction of a statutory Living Wage – at £7.20 an hour a 50p increase on the old minimum wage – should be a cause for celebration, particularly if it is due to be increased to £9 an hour by 2020. Instead it’s received a cautious welcome because of the huge degree of uncertainty about who it will really benefit. Though some estimates show that over 6 million workers are currently paid less it’s possible that only about 1 in 5 of these will probably gain directly.
Many of those who won’t, belong to the ‘cash in hand’ informal economy, some will become converted to ‘self-employed’ status though continuing to be dependent on their previous ‘employer’ for an income. Others will suffer a cut in hours, even lose their jobs completely, while workers under 25 will not benefit at all. It’s also been calculated that 2 million families could lose up to £1,600 anyway as a result of cuts to tax credits.
Some of the most ferocious opposition to the new requirement has come from employers organisations. Though it’s certainly true that many large firms continue to make ‘super profits’ at the expense of their employees, to pay big bonuses to managers and shareholders large dividends, it is also the case that, particularly in the more labour intensive parts of the service sector, there are layers of small scale operators who are dependent on low pay and an endless supply of overseas labour, to run what are basically hand to mouth businesses with low profit margins, with no desire to invest in workforce training; but at the time reminding us they are crucial in ‘providing jobs’….
Download full text A Living Wage or a Citizens Income