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Paying Living Wage makes ‘pure economic sense’ says London Mayor

Boris-living-wage-announcement-Citizens press fmj nov 13

The mayor of London has today announced new living wage rates of £7.65 for the UK and £8.80 for London at an event to mark the start of Living Wage Week –  saying the move by companies to pay the Living Wage makes makes “pure economic common sense”.

The Living Wage is a voluntary rate of pay designed to enable workers to afford a basic but acceptable standard of living.

The new London rate, which is calculated by the Greater London Authority, has risen 25p from the current rate of £8.55 while the rate for the rest of the UK, which is set by the Centre for Research in Social Policy, has risen 20p from £7.45 to £7.65. The rates are significantly more than the existing minimum wage rate for over-21s of £6.31.

New research released today at the start of Living wage Week by KPMG, finds that the number of workers paid less than the Living Wage has gone up by over 400,000 in the last year to pass the five million mark and now stands at 5.24 million workers. The research found young people, women and part timers are particularly affected, whilst in terms of occupations, bar staff, cleaners and caterers are amongst the most affected.

Low-skilled service sector jobs predominate in terms of having the greatest proportion of workers paid less than the Living Wage and are charted in the table below:

By proportion* By number*
Bar staff – 85% Sales and retail assistants – 810,000
Waiters and waitresses – 85% Cleaners and domestics – 450,000
Kitchen and catering assistants – 80% Kitchen and catering assistants – 370,000
Vehicle valeters and cleaners – 75% Care workers and home carers – 270,000
Launderers and dry cleaners – 70% Storage/warehouse occupations – 170,000

Commenting on the findings Marianne Fallon, head of corporate affairs at KPMG, said:

“Low pay is a real problem in Britain, particularly at a time when the cost of living is rising at a faster rate than earnings.

“For many businesses, paying the Living Wage rate need not actually cost any more. At KPMG, we have found that better staff performance and motivation combined with lower absenteeism and turnover cancels out the extra salary costs,” she added.

The Living Wage has been growing rapidly as a concept, with over 400 organisations (employers) now accredited payers of the rate compared to just sixty this time last year.

Facilities and support services firm, ISS is one of three leading organisations to confirm their commitment to the principles of responsible pay, by being the first in the facilities and business services sector to sign up to a service provider accreditation contract with the Living Wage Foundation.

ISS has been joined by Facilicom and Enhance, who are leading the charge of services providers who support and actively promote a Living Wage in outsourced employment. It is a proactive stance that not only cements the coalition partners’ position as ethical employers, but also aligns to the approach and values of many of their key customers including PwC, BlackRock Tube Lines and KPMG.

As a voluntary commitment, the coalition partners pledge to encourage landlords, customers and suppliers to adopt a fair wage approach. To this end, in addition to paying a Living Wage for all support staff employed on their estates, the partners include a Living Wage option in all tender submissions.

Guy Stallard, head of facilities at KMPG explained the importance of working with suppliers who share their philosophy:

“KPMG’s implementation of the Living Wage in 2006 has been a great success with increased quality of service and higher levels of productivity and flexibility. We have implemented in a cost-neutral way thanks to the pro-activity and engagement of our facilities suppliers. It is really important for KPMG to work with suppliers who are forward thinking and respect their employees.”

Richard Sykes, Chief Executive Officer, ISS UK and Ireland, said:

“I am extremely proud that ISS is the first of the major Facilities Services companies to sign the Service Provider Accreditation. Formalising our commitment to the Living Wage is a pioneering step for our industry and I sincerely hope others in the FM sector will follow our lead.”

Sandy Aird, managing director of Enhance Office Cleaning Ltd expressed a similar view when setting out the journey his company have taken and why they decided to sign up to the Service Provider Accreditation:

“After a campaign to get all Enhance staff onto the Living Wage in 2010, the vast majority of our clients agreed and now support this. The Living Wage Service Provider Accreditation recognises Enhance Office Cleaning Ltd, for our continuous promotion of fair pay for cleaners. The Living Wage is a calculation of the minimum pay rate required to enable an individual to support themselves at a basic level and as such, no-one should be expected to work for less.”

Facilicom similarly sees the accreditation as a natural progression in its commitment to fair pay principles. Phil Smith, commercial director of Facilicom, explained:

“The launch of the Service Provider Accreditation is the culmination of a two-year long association for Facilicom with the Living Wage Campaign. With so many thousands of service sector colleagues currently in receipt of low pay we are delighted to stand alongside our partners in driving a process that will significantly raise pay, enhance individual and family well-being, and deliver true social sustainability.”

The charity Citizens UK has been leading the campaign on the Living Wage for over 10 years. Rabbi Miriam Berger said:

“We are thrilled that so many companies are already signed up, but there are many more that could pay the Living Wage. The CBI are meeting in London today and we call on them to respond positively to the challenge.”







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