Sunday, 14 July 2013

Exeter City Council adopts Living Wage Policy

In amongst the wage freezes and wage cuts across the public sector Exeter City Council has done a quietly revolutionary thing: to make sure that no employees earn less than a living wage.

A living wage is not the same as the minimum wage, (which is set by the government), it is the amount seen as the minimum a person can live by  cover the basic living costs.

The council have afforded it very simply: by reducing the wages of those at the top of the organisation, and using it to supplement the wages of those at the bottom, and to weigh the increased costs of the wages against the reduced need for income related benefits such as housing or council tax benefit.

There have been many people criticising the welfare bill recently. One of the biggest group of objectors to those claiming benefits, are not just the people at the top, but those who work full time but still live relatively close to poverty at the bottom.

Despite rising living costs, the minimum wage has stagnated and is still only £6.31, meaning that people with jobs can still be at or below the poverty line.

There is a sense that someone shouldn't be able to earn the same or more in benefits, than someone who is in the same situation but working full-time.

This was seen very clearly in the recent BBC documentary on benefits, and I think that their sense of injustice is valid. 

Because I'm disabled I have carers, and I'm shocked and somewhat appalled by how little they earn. Many of them are single parents or have children but are forced to work because their partners income is too low to support them both.

But the focus has become skewed. It shouldn't be trying to push those on benefits into greater poverty, as a way to achieve greater income equality, it should be raising the minimum wage to at least the living wage (£7.45) . 

A poor working person arguing with a poor person on benefits about who is most poor, is like 2 people arguing over who has the biggest grain of rice, whilst down the hall rich people are at an eat as much as you like.

There is no reason that it would be any more difficult to implement these changes in big business, in fact it should be easier. 

All you would have to do is take money from people at the top, and redistribute it towards the people at the bottom.

It might be harder to implement in smaller businesses, but the government could make it easier by, for example, giving tax breaks to medium-sized and small businesses who pay their employees the living wage.

Putting aside everything to do with equality, fairness, and a decent standard of living, doing this makes so much economic sense.

It means that there will be a reduction in the need for some income-based benefits, it will mean that people have more cash in their pocket. The economy will never recover if people are living in poverty, because there will be no money going into the system.

And if, as the government say, (though I'm doubtful about the truth of this) that people stay on benefits because they are financially better off, it will incentivise people to get jobs because they will be able to earn more, not less, than those on benefits.

Income inequality is incredibly important, not just for individuals, but for society as a whole. Countries with greater income equality have lower crime rates, better literacy, better health and longer lives than unequal ones. 

I would like to see this living wage extended across the public sector, and into the private sector, but unless the public sector lead the way and unless there is new legislation to encourage the adoption of the living wage, it will not change. 

So in a rare moment of praise for Exeter city council, I salute them the putting this into practice, and hope that other city and county councils will also adopt it.