Co-operatives in the UK are celebrating Living Wage week, which is running from 1-7 November 2015 and is organised by the Living Wage Foundation.
The Living Wage is an hourly rate set independently and updated annually, which is calculated according to the basic cost of living using the Minimum Income Standard for the UK. Decisions about what to include in this Standard are set by the public; it is a social consensus about what people need to make ends meet.
Unlike the national minimum wage (NMW), the Living Wage is voluntarily paid by employers. NMW currently stands at £6.70 per hour for employees aged 21 and over. It is £5.30 for those aged 18-20 and £3.87 for under 18s. In comparison, the increased Living Wage rate now stands at £8.25 per hour (£9.40 for London). That represents an increase of 40p on the standard rate, and 25p in London.
On 2 November 2015, the Living Wage Foundation announced there are now over 2,000 accredited Living Wage employers across the UK, which include national retailers, banks and football clubs, as well as charities, community organisations and co-operatives.
“Today Richer Sounds, Lloyds Banking Group and Unilever […] join a growing list of organisations ranging from FTSE 100 companies to independent businesses, SMEs and third sector employers who all share our belief that work should be the surest way out of poverty,” says Sarah Vero, director of Living Wage Foundation. “The Living Wage is good for people and for business.”
The initial Living Wage movement began in 2001 by parents in East London who were frustrated that having to work two minimum wage jobs to support their families left no time for family life. The scheme is now led by Citizens UK and the Living Wage Foundation, who award the Living Wage Employer Mark to employers that commit to paying the Living Wage. According to figures from the Foundation, 20% of people working in the UK earn less than the Living Wage.
The UK as a whole didn’t introduce a legally binding NMW until the National Minimum Wage Act 1998. But the Co-operative Wholesale Society formally introduced a minimum wage for all male employees over the age of 21 more than 90 years previously – in August 1907. This was extended to female employees in 1912.
Since then co-operatives have traditionally upheld wage structures that support the co-op values of self-help and equality. Of the 1,970 Living Wage accredited employers, around 30 are co-operatives, including the Phone Co-op, Revolver Coffee and several credit unions.
“We have been paying the Living Wage since 2014, but we felt we should apply for certification from the Living Wage Foundation to encourage them in their work and then from a position of membership, we felt we would be better placed to encourage others,” says Paul Birch, director of Revolver Coffee, which received accreditation last month.
“The other thing that concerned us was George Osborne’s declaration of a ‘national living wage’ (NLW) that was considerably lower than that set by the Living Wage Foundation. We felt it necessary to underline the difference between the Foundation’s campaign rate and that rate set by the Conservative government’s chancellor.
The government’s NLW rate, which will be introduced next April, is a minimum wage premium rate of £7.20 per hour for staff over 25 years old, and is based on median earnings rather than the cost of living, as the Living Wage Foundation rate is.
The Foundation believes the Living Wage is a “robust calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay”.
Most co-operatives would agree – and there are many co-op organisations quietly paying a Living Wage rate without publicising it through accreditation, including Suma Wholefoods, the UK’s largest workers co-operative. Suma operates an equal pay structure well above the Living Wage.
“The Living wage is something that we are aware of as a co-op,” says Emma Robinson, co-operative member at Suma. “We have a plan to look into it more. The reason we haven’t done so far is mainly a lack of time.
“We are currently looking at our supplier relationships to try to ensure a living wage is paid to businesses that we work with.”
Similarly Co-operative Press, which publishes Co-operative News, is proud to be a Living Wage accredited employer, and already committed to paying above the Living Wage before this month’s increased rate.
While he would encourage other co-operatives to apply for accreditation, Revolver Coffee’s Paul Birch warns that “the moment you think about Fairtrade, Fair Tax, Living Wage etc as tick box exercises, you may as well go home”.
He adds: “You have to embed ‘fair’ into your business, and people who deal with you will either know instinctively that your organisation reflects that view, or they will suspect you are ticking boxes.”
- The cost of accreditation starts at £50 for the smallest organisations, up to £1,000 for the largest private sector employers. There are reduced prices for the public and charitable sectors, and the process can take as little as ten days. For more information visit www.livingwage.org.uk.
- Take a look at our case studies of co-ops who have chosen to be Living Wage employers.
In this article
- Conservative government
- director of Revolver Coffee
- Emma Robinson
- George Osborne
- Living wage
- Living Wage Foundation
- Minimum wage
- National Minimum Wage Act
- Paul Birch
- Suma Wholefoods
- Tim Munden
- Unilever UK
- United Kingdom
- United Kingdom
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