Monday, 3 November 2014

Is the Living Wage affordable?


Andrew Fisher

This is a quick follow up to yesterday's post - The Living Wage and perceptions of pay - featuring opinion poll data on pay and the affordability of the living wage.

There was an interesting contrast between how the higher paid and lower paid perceived whether their employer did or could afford to pay the living wage. But as one perceptive tweeter observed, that doesn't tell us whether employers actually could afford to pay up:
"Would be interesting to know how accurate perceptions are; how many employers can afford to pay the living wage but don't."
So what is the reality? Well, for starters there are 20 obvious candidates that could pay their staff the living wage. These are the 20 Premier League football clubs, none of whom according to this Citizens UK report pay the living wage - and Labour campaigners are targeting them.

But outside of those employers like the free-falling football megapower that can pay an over-rated mediocrity £1,785.71 per hour, is the living wage affordable for more regular employers in low paying areas like retail and hospitality?

That depends what we mean by 'affordable'? Does affordability includes reducing profit margins, cutting executive bonuses, slashing shareholder dividends, perhaps even redistributing pay from the higher echelons of a company?

And then of course, there is the question of whether consumers would/should pay more for goods or services (if necessary) to make the living wage affordable?

So when technocratic reports suggest a certain level of wage is or isn't affordable, such assessments are usually made without these questions being explored.

There is one thing that tends to make higher wages suddenly affordable and that is collective action - usually in the form of trade union members prepared to fight for the dignity of a living wage. And few such campaigns have been so inspirational as that of the Ritzy cinema workers who have won the living wage and secured their jobs.

Campaigning can make the unaffordable affordable.

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