31 August 2010

The minimum wage is one of the most progressive measures of the last fifty years. It is to Labour’s vast credit that it introduced the mandatory wage in the face of Tory opposition and insisted that it should be a national wage in the face of Libdem notions of different regional wages which would, as I have pointed out in this post, have left workers in Cornwall at a distant bottom regional level. Workers in Cornwall, and especially women, have gained immensely from this mandatory, national wage: this has been a godsend to them and, with Labour tax credits that top it, has improved the lives of many families here, although the tax credit system is needlessly complicated.

The minimum wage is £5.80 an hour, due to rise in October 2010 to £5.93 an hour. It represents the floor below which no adult worker should fall. However, the minimum wage, for all its benefits, has proved insufficient for a decent life on its own.

For some time now progressives in all parties in the UK have been advocating a living wage which offers dignity and motivation to workers and better productivity to employers. Boris Johnson, Tory mayor of London, actively supports it. Ed Miliband, one of the candidates in the long-drawn-out Labour leadership election, has been pushing the idea forward. See here for the arguments and useful links.

The Joseph Rowntree Foundation (JRF) has researched a minimum income standard. See the JRF research A minimum income standard for the UK in 2010. It explains that the minimum income is what “members of the public, informed where relevant by expert knowledge, think should be covered by a household budget in order to achieve a minimum socially acceptable standard of living” (Executive summary page 4). Pages 20-22 look at the living wage. Campaigners have put the figure for a living wage at £7.20 an hour outside London.

The living wage is presently voluntary and discretionary, a benchmark for employers and, unlike the floor of the minimum wage, it would vary across the country, reflecting local conditions as to the income needed. Several public and private bodies have already adopted it including the Greater London Council. Its adoption does not mean the minimum wage can be neglected and allowed to wither: that remains as the statutory minimum.

The JRF document explains what this means: “A minimum standard of living in Britain today includes, but is more than just, food, clothes and shelter. It is about having what you need in order to have the opportunities and choices necessary to participate in society. Thus, a minimum is about more than survival alone. It covers needs, not wants, necessities, not luxuries” (page 7). Not lavish: the living wage suggested by campaigners currently works out at around £14 040 a year for full time employment; the ‘minimum income standard’ would be £14 800 a year for most sorts of household.

I am not entirely convinced that our long term aim should be for a mandatory lowish minimum wage for all and a higher discretionary and locally-set living wage for some. We should aim to ensure that everyone is paid a living wage. We should aim to pay everyone the minimum they need to live a decent life in society, a decent life not a lavish life. Is this really impossible in Britain? Would it price out too many jobs to make it mandatory?


In the post Specificating Cornwall I raised again the question of the disadvantage here if Cornwall was treated distinctively. For Cornwall, a county with a surfeit of low wages, a local living wage could raise difficulties. However, a living wage could reasonably reflect local conditions if localising the wage was genuinely not a cost-cutting project and did not reflect existing low pay, but objectively assessed the level of a living wage in Cornwall with criteria applied across Britain.

In the long term, we should aim for a viable mandatory (and localised) living wage. Right now, I should like to see as many institutions and companies as possible in Cornwall sign up to the discretionary living wage. I haven’t calculated what it specifically should be for Cornwall but £7.20 an hour is a working figure. For a 37.5 hour week it is equivalent to around £14 040 a year, still low and around the 20th percentile of pay in Cornwall [ASHE data for 2009, table 8.1a, all fulltime workers by place of residence]. Yes, I know this is a time of austerity but those working on very low pay should be helped. Cornwall employers, both the private sector and the public services such as the council and hospital and their subcontractors, can’t move their low-paid people to a living wage overnight but can responsibly over time. Let’s make a start at least, let’s signal intention. Let’s shine a little light of hope and encouragement in the darkness that is brutal deficit reduction and put down a marker for tomorrow.

Let’s put on one side the day trips to the middle ages. I have no doubt that most low-paid people in Cornwall and most progressives here will wish the focus to be on, will wish the fierce effort to be directed at, the living wage. The living wage is the pro-Cornish wage, part of the real pro-Cornish agenda. Let’s go for it.

EDITED 2011 for a £7.20 living wage.