This week the mayor of London, Sadiq Khan, unveiled the new hourly rate for the London living wage at the start of Living Wage Week.
Nationally, the living wage rate has reached £8.45 per hour. In London, recognising the expenses associated with living and working in the capital, the rate has increased from £9.40 to £9.75 getting steadily closer to the £10 mark. This is an increase of 3.7 per cent on last year, and the London living wage is now £2.55 per hour more than the government’s deliberately and confusingly named ‘national living wage’ of £7.20
This rise is welcome. Nowhere is the rising cost of living felt than in London not least because of the extremely high cost of housing. The impact of Brexit, including the recent fall in the pound and the associated increase in inflation likely to lead to considerable food price inflation will further hit the lowest paid hardest. Whether you like it or not, the price war over Marmite is a sign of things to come.
Low pay is not solved in itself by an uprating of the living wage, however and only those workers whose pay is linked to the living wage or London living wage will receive it. Take up by employers is still fairly low. As the FT reported, just 3000 employers across the United Kingdom have committed to pay the new rate to their workers by April 2017. Under Boris Johnson it was generally the low hanging fruit that were the target of his efforts in this area; companies with low numbers of low paid workers. While his goal of trying to make the living wage a norm is an excellent goal, it remains the case that low pay not fair pay is the norm for all too many workers. Figures released by KPMG this week estimate that 722,000 Londoners are currently paid below the London living wage. Of this, 43 per cent are part time workers – the majority of whom are women – earn less than the London living wage compared to 14 per cent of full-time workers. The Social Market Foundation has also highlighted the particular problems of low pay faced by those classed as ‘self-employed’ in their recently published report Tough Gig.
Nationally it is welcome to see the parliamentary Labour party spell out that a real living wage means and linking it to what should not be a radical idea: having enough to live on. We need to ensure that nobody is allowed to beat around the bush on what low pay means – from missed rent payments, missed meals to missed opportunities. We also need to refuse to allow Brexit to be assumed to be a reasonable excuse whereby employers are able to excuse low pay due to the impact of supposed or actual uncertainties associated with Britain leaving the EU. Low pay is at epidemic levels and in London alone the number of people in a working household living in poverty has risen from 700,000 to 1.2 million in the last decade.
Clearly we have a long way to go if we are to eradicate low pay and in-work poverty. The ultimate goal has to remain an uprating of the minimum wage/national living wage to a genuinely living wage. With the current government it is unlikely we will get this. In the meantime it is down to all of us – as both consumers and campaigners – to make a more concerted effort to make a difference.
Leadership on this matter is crucial and our mayor of London, Sadiq Khan, is already demonstrating that he is putting his money where his mouth is by ordering all functional bodies of the Greater London Authority to conduct an audit to tackle bad employment practices after the London Transport Museum was found to be failing to pay subcontractors the London living wage.
While Khan is taking action and – unlike his predecessor – has the determination and drive to make real progress in tackling low pay, we all need to keep banging the drum in order that everyone’s basic wage can meet the real and rising costs of living.
Fiona Twycross is a member of the London assembly and chair of the London Fire Authority. She tweets @fionatwycross
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