EC LCCGE Debate on Living Wages 27 08 09


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Ethical Corporation and the LCCGE hosted a roundtable debate on living wages and the responsibility of corporations.

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EC LCCGE Debate on Living Wages 27 08 09

  1. 1. Living Wages Sue Konzelmann, Director LCCGE, Toby Webb, Ethical Corporation, Pam Muckosy, Ethical Corporation, Roundtable Debate on Living Wages Birkbeck, 27 August 2009
  2. 2. Living Wages A living wage is ‘a wage that achieves an adequate level of warmth and shelter, a healthy palatable diet, social integration and avoidance of chronic stress for earners and their dependents.’ (Family Budget Unit 2009)
  3. 3. Living Wages <ul><li>Historical Roots </li></ul><ul><li>Early history </li></ul><ul><ul><li>Rerum Novarum (1891) </li></ul></ul><ul><ul><li>Turn of century legislative reform movement </li></ul></ul><ul><ul><li>Quadragesimo Anno (1931) </li></ul></ul><ul><li>Modern living wage movement </li></ul><ul><ul><li>Baltimore Living Wage Act (1994) </li></ul></ul><ul><ul><li>London Living Wage Campaign (2001) </li></ul></ul><ul><ul><li>London Living Wage Unit (2004) </li></ul></ul>
  4. 4. Living Wages <ul><li>Poverty threshold wage: £6.65 </li></ul><ul><ul><li>Average (rounded to nearest 5 pence) of </li></ul></ul><ul><ul><li>Basic Living Cost Approach: the wage required to meet a ‘low cost but acceptable’ budget for a typical family (£6.45) </li></ul></ul><ul><ul><li>Distribution of Income Approach: 60% of median hourly wage (£6.80) </li></ul></ul><ul><li>London Living Wage: £7.60 </li></ul><ul><ul><li>Add 15% to un-rounded poverty threshold wage </li></ul></ul>Source: 22 May 2009 London Wage Unit Calculation & Current Figures 20 % 47 % 15 % £7.60 London Living Wage 15 % 37 % 10 % £6.65 Poverty Threshold wage 10 % £5.73 National Minimum wage Full & P-time Part-time Full-time Percent of GLA workers earning below various wage levels Earnings per hour:
  5. 5. Living Wages <ul><li>Living Wage Employer Award </li></ul><ul><li>The Living Wage Employer Award recognizes ethical employment and ethical procurement practice </li></ul><ul><li>All staff must be: </li></ul><ul><ul><li>paid at least the Living Wage </li></ul></ul><ul><ul><li>Eligible for at least 20 days paid holiday a year plus bank holidays </li></ul></ul><ul><ul><li>Eligible for at least 10 days sick leave a year </li></ul></ul><ul><ul><li>Allowed free access to a trade union </li></ul></ul>
  6. 6. Living Wages <ul><li>The Critics </li></ul><ul><li>A wage floor is harmful to low wage workers, employers and society as a whole </li></ul><ul><ul><li>Low wage workers become unattractive to potential employers </li></ul></ul><ul><ul><li>Increased cost of living reduces buying power of low wage earners, leaving them no better off </li></ul></ul><ul><ul><li>Costs of production, inefficiency and inflation are also increased </li></ul></ul><ul><li>There are less disruptive ways of delivering income to the poor </li></ul>
  7. 7. Living Wages <ul><li>The Proponents </li></ul><ul><li>The academic literature: </li></ul><ul><ul><li>Living wage provisions are not found to be associated with job losses or worker displacement </li></ul></ul><ul><ul><li>There is evidence of productivity increases </li></ul></ul><ul><ul><li>Increased cost pressure provides incentives for firms to seek efficiency and cost savings elsewhere </li></ul></ul><ul><li>London Economics Study (2009) </li></ul><ul><ul><li>Benefits: recruitment & retention, absenteeism & sick leave, productivity, morale & motivation, reputation, employee financial & welfare benefits, workplace change </li></ul></ul><ul><ul><li>‘ There is a real business case for organizations to implement the London Living Wage.’ (p. 4) </li></ul></ul>
  8. 8. Living Wages <ul><li>For the Debate </li></ul><ul><li>Whose responsibility is it to make sure that working people make a decent living? </li></ul><ul><li>How much is enough? </li></ul>
  9. 9. Living Wages <ul><li>EC Findings – the Issues </li></ul><ul><li>Tangible action </li></ul><ul><li>Supply chains or living wages? </li></ul><ul><li>Blame governments or employers? </li></ul><ul><li>Wage levels are always on the campaigner/trade union agenda </li></ul><ul><li>No consistent definition </li></ul><ul><li>Inconsistent application </li></ul><ul><li>Labour union-NGO tension </li></ul><ul><li>Who should bear the added cost? </li></ul><ul><li>Ignores agricultural and informal sectors </li></ul><ul><li>Wages set by global (not national) D & S of labour </li></ul>
  10. 10. Living Wages EC Findings – the Players Employers: supplier codes of conduct, job security, decent hours, safe working conditions, training & development, & contribution to the local economy. Government: social security, minimum wage, supporting select industries , defining and mandating a living wage. NGOs: research, campaigns, translate the local context & define living wages, & provide a platform for discussion. Unions: collective power, negotiations, & keep the debate going.
  11. 11. Living Wages Dozens of definitions & methods for measuring & transferring income. Just a few… Decent work Forms of capital Livelihoods LED & VCA & Inclusive growth Direct transfers Access Basic needs Vulnerability
  12. 12. Living Wages <ul><li>EC Findings - What’s ahead? </li></ul><ul><li>Adjusted cost of living used for relocated managers </li></ul><ul><li>Research and plan for smaller margins </li></ul><ul><li>Campaign or legislate retailers </li></ul><ul><li>Government use of an inclusive tri-partite process </li></ul><ul><li>Campaign & work with employers to implement living wage </li></ul><ul><li>FLA wage ladder </li></ul><ul><li>Integrate living wage into a social audit </li></ul>
  13. 13. Living Wages <ul><li>Your views… </li></ul><ul><li>Whose responsibility is it to make sure that working people make a decent living? </li></ul><ul><li>How much is enough? </li></ul>
  14. 14. Living Wages ‘ How to embed corporate responsibility across different parts of your company’ WWW.ETHICALCORP.COM/CSR If you would like internal training, or to be added to our mailing list, please email me at or visit