Progress | Centre-left Labour politics

Rebranding poverty pay will not solve the problem

With so many people experiencing in-work poverty, low pay appears to be an issue the Tories are unwilling to tackle, writes Kate Dearden

As the living wage week comes to an end, the Living Wage Foundation has announced there are now over 3,600 employers in the United Kingdom that have signed up to the living wage.

This is a fantastic achievement for the foundation, and for the thousands of workers that this week are celebrating a rise of the living wage to £8.75 an hour to everyone over 18 outside London and £10.20 in London.

Companies such as IKEA, Lidl and Lush, Chelsea, Everton and Liverpool football clubs, ITV, Google, Oliver Bonas and a third of FTSE 100 companies have signed up and are expected to implement the recent rates by the end of this financial year.

The impact of rising inflation to soaring prices of housing and rent, transport, the cost of a weekly shop, and stagnant wages means families in low pay are feeling the squeeze of the increased cost of living in Britain.

Only last year the Tories introduced a higher minimum wage rate for all staff over 25, and even attempted to guise themselves as the party for working people by calling it the ‘national living wage’.

However, this higher rate is based on a target to reach 60 per cent of median earnings by 2020, and offers no London weighting. This means less than £9 per hour by 2020 and isn’t calculated according to what families need to live.

That is why it is credit to the Living Wage Foundation, and to the 3,600 UK employers who have signed up to an actual living wage. A wage that is independently-calculated by the Resolution Foundation thinktank, and overseen by the Living Wage Commission, is based on what people need to get by.

With over 60 per cent of British people living in a household where someone is experiencing in-work poverty, the scale of the problem is something the Tories are either not fit or unwilling to tackle.

In addition to this, 5.5 million people are still paid less than the real living wage, and it is women who are hit the hardest making up 62 per cent of low-paid workers.

This is why it is crucial that we work with employers and get more businesses signed up and engaged, or the goal for achieving the living wage for every worker will continue to be a challenge for the future. In particular we need to work with those employers with greater numbers of low-paid workers as well as those companies who have big profits but few low-paid workers.

Paying a decent living wage is not only the right thing to do, but has real benefits for businesses. Lower staff turnover, employees who feel valued and increased productivity are just a few examples of why great businesses and organisations chose to pay their employees a wage that is enough to live on.

This is the sixth living wage week, and every year we have seen brilliant achievements from the Living Wage Foundation, but we cannot expect them to deliver by themselves when over four million workers are still expected to be in low pay by 2020.

Celebrating the living wage week is a week of positive action, it is a celebration of what can be achieved when this Tory government doesn’t deliver for the thousands of workers across the UK that need them to.

The Tories are not, and never will be the party for working people, no matter how many rebrands of poverty pay they want to try. Labour championed the minimum wage and now in opposition it’s up to us to champion the living wage, working together with our unions, businesses and employers to put fairness, dignity and respect at the core of their businesses.


Kate Dearden is the Campaigns and Research officer at Community and former National Chair of Labour Students. She tweets at @kate_dearden


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Kate Dearden

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