The price of not paying a living wage

In businesses up and down the land a story is being told about a demon-goddess who promises love but brings only death and destruction; that demon is the living wage.

I know this because I have spent the last 18 months at a small housing association in the north of England trying to convince the chief executive to become a living wage employer. He thinks I’m as naive as the policy wonks who dreamt up the idea having never experienced the death-by-a-thousand-cuts business world in their cosseted little lives.

This is how he sees it. Take one minimum wage asset, add the living wage and, hey presto, your asset becomes a liability and your business has gone up in smoke. The market tells businesses what salaries are realistic and sustainable. Ignore it and you might as well pop a poison pill.

Since I first joined the organisation as a personal assistant cum human resources officer cum PR officer cum administrator on £13,500 a year, my argument has been that adults grafting day in, day out shouldn’t have to live in fear of everything that costs something. I know many are in debt because I’ve seen the attachment of earnings orders; I know some have second jobs because I’ve seen the working time directive opt out forms, and I know that not one of our minimum wage employees is in the pension scheme.

Right now it feels as if human decency is on a zero hours contract.

There are no penalties and precious few incentives for becoming a living wage employer.

This is how I see it. The market is not all-seeing, infallible or value neutral. If low waged employees had a voice the market (is there just one?) would be a very different beast. Employers can choose to be their own market. To those who say it’s impossible for a business on the poverty line to be a living wage employer, I say look at the figures, think about how to make more or lose less and maybe even consider restructuring salaries at zero cost. Conventional wisdom isn’t the same as truth.

I appreciate that our charity is losing money as public sector contracts shrink in value or disappear. Where else could our eyes be but on the bottom line? I can see why my employer covers his eyes and trembles with terror every time he sees the Night of the Living Wage. Between you and me I’m a bit scared of the living wage too. I fear that people currently in mid-range jobs will be pulled into the living wage vortex by employers all too willing to dine on the moral high ground while nibbling away at salaries. I fear that if the living wage had legal force the established powers would find ways of making it work for ‘them’ at the expense of ‘us’ as they always do. But the living wage at least puts the language of human decency in the business lexicon. Surely, that’s a start?

Right now it feels as if human decency is on a zero hours contract. There are no penalties and precious few incentives for becoming a living wage employer. Face it, if they pushed us over the poverty cliff tomorrow there’d be 100 people queuing up to take our place for less. I know this because my employer has done it with great success.

Unless it becomes law, the living wage will continue to be an optional extra, the head of cream on a mug of low fat hot chocolate. Employers like mine will continue to insist it should come with a health warning, and employees like me will argue that on a macro level ‘poverty for all’ is a recipe for economic stagnation at best. If we, the masses, have little to spend and even less to save, those paying the legal minimum aren’t saving their own lives. They’re digging graves for us all.

Unless it becomes law, the living wage will continue to be

an optional extra, the head of cream on a mug of low fat hot chocolate.

My employer doesn’t believe in the living wage. He thinks that if you become a living wage employer you tie yourself to a bucking beast that will throw you and trample the staff you were trying to support. He believes people always want more so ultimately the living wage contains an ever increasing element of human greed. He thinks it is dangerous to blur the remuneration boundaries between employees who perform mechanical tasks and those with responsibilities that require intelligence, initiative and the ability to speak in corporate tongues. If you pay a living wage without maintaining salary differentials there will be little incentive for taking on such roles. He is glad there is no political will to make the living wage mandatory.

Convincing employers to think of staff who consider it a luxury to heat their homes in winter (a friend who works as a cleaner), throw prescriptions in the bin because they can’t afford the medication (me) and fall asleep at work because of their second jobs (a colleague) is only the start. We have to effect a generic cultural shift. It pains me when people on low wages shrug and tell me they’re lucky to have a job or that I’m lucky to have a job. Cynical exploitation shouldn’t be anyone’s idea of luck.

A nouveau riche friend tells me those of us on low incomes simply need to learn to live within our means. We don’t need to smoke, drink, have children, pets, holidays, takeaways, social lives, cars, flatscreen TVs. These things are luxuries and if we can’t afford them we should either do without or work harder and earn more. Poverty is a lifestyle choice and actually gruel is quite tasty with a sprinkling of cinnamon.

I have so far failed to convince my employer to adopt the living wage. He says he has looked at the figures and they don’t add up. He says he has asked the board and they weren’t even willing to consider moving towards becoming a living wage employer. I give myself points for trying.


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9 years ago

I give you a zillion points for trying. I worked for a HA as zero hours worker. They dumped me (maybe I was a risk to bad PR) and used an agency who were paying the minimum wage to find my replacement. That will be the next wicked step. Companies will proudly adopt the living wage and then use an umbrella company to employ their workers who are on on minimum wage.

9 years ago
Reply to  Angeangel

Sounds as if they already are! A lot of companies are also using more and more volunteers, trainees and ‘apprentices’ – people who aren’t defined as ’employees’ and are therefore not included in any wage related campaigns.

The council in my city is a living wage employer, but its contracts contain no provision for central/admin costs. Our company therefore pays the living wage to those directly associated with the contract and the minimum wage to the admin workers, maintenance workers and cleaners to whom the contract effectively turns a blind eye. We’re not their problem and we’re a very easy target. By the way, we’ve also just taken on a trainee and an apprentice. Where there’s a will to pay little or nothing, there are several ways.

Aaron Cavanaugh
Aaron Cavanaugh
9 years ago

There are two ways to kill a company. One is to have no profit. Two is to hold all the money at the top so no one else gets any. Thanks. God bless. Aaron

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