Where next for the living wage?

Progress on low pay is imperative.

Tomorrow marks the start of the first Living Wage week. It is tangible proof that, 11 years after a small broad-based East London community alliance revived an idea first forged in the industrial heartlands of 1870s Britain, momentum for increased living wage coverage continues to gather pace.

And with good reason: at a time when powerful forces are bearing down on wages at the bottom end of the labour market, living wage campaigns have delivered tangible gains for thousands of low-paid workers. More widely, living wage initiatives have served as a powerful rallying cry against endemic levels of low-paid work, highlighting the power of social norms in challenging a low-pay, low-productivity economic model that is anything but pre-determined. 
 
Yet for all the success of the living wage campaign relatively few workers have secured a higher wage as a result of a living wage initiative. For example, there are an estimated 651,953 workers in London earning less than the London Living Wage, yet only around 10,341 London workers won a living wage in the six years between 2005 and 2011. This is not a cry of despair, simply a call for realism about the role that living wage initiatives can play in tackling our reliance on an extensive pool of low-paid labour and for targeting efforts where they will be most effective.  
 
Of course, the latter would be far easier if there was greater transparency around low-paid work. There is therefore a powerful case for amending the UK Corporate Governance Code to require listed companies to report on how many of their employees receive less then a living wage – as called for in the final report of the Resolution Foundation’s Commission on Living Standards. At a stroke such a move would begin to alter our tolerance of endemic levels of low pay, laying the ground for further gains. 
 
And we know that further progress is possible. Our estimates suggest that for large private sector companies in key sectors like banking, construction, food production and communications – where roughly a million people in total work below living wage rates – the costs of paying a living wage for all directly-employed staff are affordable at around 1 per cent of the firm’s wage bills. 
 
Of course, different companies will be better able to absorb these costs than others and the introduction of a living wage pay floor will be more challenging for companies in the major low-wage retail sectors (increases in wage bills of between 4.7 and 6.2 percentage points) but progress is still possible.
 
It is also imperative given the growing awareness that the public purse can no longer sustain the high cost of the UK’s reliance on 5 million workers – 1 in 5 employees – who earn above the legal minimum but below a living wage. It is not just low-paid workers and their families that bear the cost of low-paid work on this scale in strained budgets and diminished life chances. Taxpayers also pay to the tune of around £4 billion a year in in-work support for low earners. 
 
With few, if any, believing that the growth in tax credit support that occurred over the past decade can be repeated in these fiscally straitened times there is an urgent need to start developing an ambitious policy agenda to tackle low pay at source. For any policymaker serious about doing so living wages are an integral, if only partial, part of the solution. 
 
But there is a very real need to start matching words with deeds. Over the past decade politicians from across the political spectrum have competed to associate themselves with the idea of the living wage, safe in the knowledge that the voluntary nature of living wage agreements and their partial coverage made doing so almost consequence-free. With the role, rationale, strengths, limitations and policy potential of living wages now under increased scrutiny the window for endorsement devoid of decision is beginning to close. 
 
The transition from approval of living wage initiatives to concrete policy ideas to support their proliferation will not be easy. Yet there is a path for policymakers between inaction and reaching for a legislative solution in the form of a statutory living wage which few living wage advocates would endorse. That path not only involves fostering greater transparency around low pay but also thinking about the use of central and local government’s purchasing power and how the notional savings in state support that would accrue from more extensive living wage coverage might be used to help firms transition to better business models. None of this will be simple. But the alternative of not matching words with deeds is no longer a justifiable option at a time when we need wages to do far more of the heavy lifting if the living standards of low earners are not to decline rapidly. 
 
Matthew Pennycook is senior research and policy analyst at the Resolution Foundation
A street cleaner passes the Jobcentre Plus office in Bath (Photo: Getty Images)

Matthew Pennycook is MP for Greenwich and Woolwich, and member of the Energy and Climate Change Committee. He is PPS to John Healey. 

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A swimming pool and a bleeding toe put my medical competency in doubt

Doctors are used to contending with Google. Sometimes the search engine wins. 

The brutal heatwave affecting southern Europe this summer has become known among locals as “Lucifer”. Having just returned from Italy, I fully understand the nickname. An early excursion caused the beginnings of sunstroke, so we abandoned plans to explore the cultural heritage of the Amalfi region and strayed no further than five metres from the hotel pool for the rest of the week.

The children were delighted, particularly my 12-year-old stepdaughter, Gracie, who proceeded to spend hours at a time playing in the water. Towelling herself after one long session, she noticed something odd.

“What’s happened there?” she asked, holding her foot aloft in front of my face.

I inspected the proffered appendage: on the underside of her big toe was an oblong area of glistening red flesh that looked like a chunk of raw steak.

“Did you injure it?”

She shook her head. “It doesn’t hurt at all.”

I shrugged and said she must have grazed it. She wasn’t convinced, pointing out that she would remember if she had done that. She has great faith in plasters, though, and once it was dressed she forgot all about it. I dismissed it, too, assuming it was one of those things.

By the end of the next day, the pulp on the underside of all of her toes looked the same. As the doctor in the family, I felt under some pressure to come up with an explanation. I made up something about burns from the hot paving slabs around the pool. Gracie didn’t say as much, but her look suggested a dawning scepticism over my claims to hold a medical degree.

The next day, Gracie and her new-found holiday playmate, Eve, abruptly terminated a marathon piggy-in-the-middle session in the pool with Eve’s dad. “Our feet are bleeding,” they announced, somewhat incredulously. Sure enough, bright-red blood was flowing, apparently painlessly, from the bottoms of their big toes.

Doctors are used to contending with Google. Often, what patients discover on the internet causes them undue alarm, and our role is to provide context and reassurance. But not infrequently, people come across information that outstrips our knowledge. On my return from our room with fresh supplies of plasters, my wife looked up from her sun lounger with an air of quiet amusement.

“It’s called ‘pool toe’,” she said, handing me her iPhone. The page she had tracked down described the girls’ situation exactly: friction burns, most commonly seen in children, caused by repetitive hopping about on the abrasive floors of swimming pools. Doctors practising in hot countries must see it all the time. I doubt it presents often to British GPs.

I remained puzzled about the lack of pain. The injuries looked bad, but neither Gracie nor Eve was particularly bothered. Here the internet drew a blank, but I suspect it has to do with the “pruning” of our skin that we’re all familiar with after a soak in the bath. This only occurs over the pulps of our fingers and toes. It was once thought to be caused by water diffusing into skin cells, making them swell, but the truth is far more fascinating.

The wrinkling is an active process, triggered by immersion, in which the blood supply to the pulp regions is switched off, causing the skin there to shrink and pucker. This creates the biological equivalent of tyre treads on our fingers and toes and markedly improves our grip – of great evolutionary advantage when grasping slippery fish in a river, or if trying to maintain balance on slick wet rocks.

The flip side of this is much greater friction, leading to abrasion of the skin through repeated micro-trauma. And the lack of blood flow causes nerves to shut down, depriving us of the pain that would otherwise alert us to the ongoing tissue damage. An adaptation that helped our ancestors hunt in rivers proves considerably less use on a modern summer holiday.

I may not have seen much of the local heritage, but the trip to Italy taught me something new all the same. 

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear