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Income Inequality is the ogre of our time. We must slay it

Sunday 1st November 2015

The Archbishop writes in the Observer on the importance of paying a living wage...

  

Rewarding a hard day’s work with a fair day’s pay seems like a sensible enough suggestion, but years of stagnant, and even falling wages, in a whole host of job areas including manufacturing, the public sector and construction has seen the reality of this phrase become far from the norm for millions of workers across the UK.

Figures released today show that more than six million workers earn less than the Living Wage. So whilst unemployment may be falling, and some wages rising, the picture in the homes of workers across the country isn’t as bright as we may be led to believe from headlines alone.

Wages have been stubbornly clinging to the legal floor around the minimum wage for far too long, and whilst the intervention of the Chancellor in the summer budget will see a welcome increase in minimum wage rates for the over 25s in April, with continued increases until at least 2020, there’s still room for many businesses that can, to go further still, and pay their staff a wage that reflects the real cost of living in the UK.

Tomorrow the new Living Wage rates will be announced. Accredited Living Wage employers are responsible employers. We must celebrate and champion these businesses, they aren’t waiting for Government to tell them what to do, they are voluntarily paying their staff at a rate that’s calculated independently and based on the cost of living today.

As a Christian I’m often asked to explain the moral case for paying the Living Wage and why we should take seriously these words of Jesus Christ: “The worker deserves their wages.” He treated people with respect, and we must do the same. Yet it would be naive of me to expect businesses to simply follow their hearts; the beauty of the Living Wage is that whilst it is rooted in the social teachings of many religions, it also makes good business sense.

 When the Living Wage is introduced by employers, everyone gains. Morale goes up. When work feels worthwhile because it’s more than a drudge, its quality improves.  Raising pay to a living wage would boost the economy by stepping up workers’ spending power. They would also be paying more tax, putting more money into the pot for health and education. Doing what is right also pays incalculable dividends.

Recently there have been welcome and bold moves from Lidl and Morrisons who are now paying Living Wage rates in the retail sector; a sector that has long reported that the Living Wage simply could not work on the UK high street. Leadership on this scale will see more businesses follow their lead, and those businesses that can, really should pay the Living Wage. For others, particularly those in the care sector, or small businesses that are trying to grow, we need to find ways to support them to be able to aspire and develop, with a mark of success being recognised as their ability to pay the Living Wage to their staff. A strong national minimum wage is something to be proud of, but a fairly paid, productive workforce earning enough to live on will be something to shout about.

 

In a Joseph Rowntree Foundation Report, “Will the 2015 Summer Budget Improve Living Standards in 2020?”, by Donald Hirsch, (published last month) he makes it clear that after seven years of declining living standards, the pause in rising costs is a very welcome respite. But that many low income households are still much worse off than in 2008, leaving them struggling to make ends meet and reliant on benefits to top up their incomes. For me these are hard-pressed families on poverty wages.

To help narrow the gap between wages and basic living costs, the Joseph Rowntree Foundation Report calls for:

 

·     action to boost productivity, creating better paid, secure and flexible jobs for people on low incomes;

·     employers to pay the Living Wage where affordable;

·     a greater supply of genuinely affordable homes.

 

Addressing these issues will help reduce the need for people on low incomes to rely so heavily on tax credits and housing benefit to maintain a decent living standard.

A little over a century ago, Winston Churchill gave a speech, as President of the Board of Trade, saying,

"It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions" (Speech to the House of Commons, 28 April 1909).

Much has changed since then, but the principle that Churchill spoke to remains as strong as ever in our national life.

Let us make the paying of the Living Wage the litmus test for a fair recovery and let us help our country become a place where the wellsprings of solidarity, of a new, undivided society, can begin to spring up.

 Income equality is the giant of our time, which we must slay. The Living Wage is a crucial tool in our armoury.

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