From today, many low-paid workers will begin to receive the so-called “national living wage”.
Of course, the new wage level is anything but a “living wage”. It pays more than a pound less than the real living wage (two pounds less than the London living wage).
It only applies to those aged 25 and over, leaving many young low paid workers stranded on poverty pay. And there’s a real risk that employers “level down” to the new national living wage or cut other conditions, even though it’s still hard if not impossible to live on it.
The new “nNational living wage” is a living wage only in the sense that it is a wage that people who are living will earn. In reality this is a rebranded national minimum wage for those aged 25 and over.
There are real concerns about how it’s going to be implemented too – especially in the public sector and their contractors. It’s estimated that these changes will cost the NHS over £250m by 2020 – and the government is silent on where the cash will come from.
Meanwhile, the LGA puts the cost of implementing the new wage in local government at £1bn over the same period. That’s a period in which local government funding will continue to fall – despite this additional pressure being placed on budgets.
Obviously anything which increases wages for the low paid should be supported, but at present it’s unclear how the government plans on making the sums match up on public sector pay, which could jeopardise overall pay settlements. And some employers are already using this as an opportunity to reduce pay rises for all staff.
Finally – and perhaps most importantly – we need to be sure that everyone who is due the new “national living wage” receives the pay they’re entitled to.
As we see in the homecare sector (to name one prominent example), many are still not receiving the national minimum wage nearly two decades after it was introduced.
So the new national living wage needs to be applied across the board, must include travel time and must see workers – particular those in insecure and part-time work – paid what they are entitled to.
In the next few days, the government will doubtless use the launch of this new legal minimum pay rate as an excuse to claim that it is paying “the living wage”. It is not – and that must be refuted forcefully.
But at the same time we also have to fight to ensure that those who the public rely on, yet are paid far below what their work is worth, are not further penalised as a result of reforms that claim to be for their benefit.