Scottish Living Wage campaign

Today is the start of Living Wage Week. This opportunity to promote the Scottish Living Wage got off to a good start with the announcement that the current rate of £7.20 per hour is to rise to £7.45.

The Scottish Living Wage campaign supported by UNISON Scotland has a number of events planned for this week. There has been good political support as well with Ed Miliband's speech today. This follows yesterday's Observer piece by Dave Prentis and David Miliband. We also have an excellent Fair Wage campaign by the Scottish Youth Parliament.

The Scottish Living Wage is good news for workers as they get higher wages that also improves health and job motivation. It’s good for employers because it reduces turnover, improves productivity and attracts better staff through reputational gain. The wider community benefits through lower benefit cost, less stress on the NHS and cash into the local economy.

The Institute of Fiscal studies has calculated sub-living wage employers cost the taxpayer £6bn a year in in-work benefits alone. The indirect cost on poverty is around £25bn a year.
In contrast the cost to employers is minimal at around 1% of wage bill. Even in the retail sector it is only 5%. As a recent study of the London Living Wage shows, even that can be recouped through decreased turnover and better productivity. I don't often, if ever, quote Boris Johnson positively but he say, “I believe that paying decent wages reduces staff turnover and produces a more motivated and productive workforce”.

There has been good progress in extending the Scottish Living Wage across the public sector. The Scottish Government, NHS Scotland and most councils now pay this rate. The next stage is to persuade the Scottish Government to take further action including in the forthcoming Procurement Bill to promote the Scottish Living Wage including:

Use the Procurement Reform Bill to amend the Public Contracts (Scotland) Regulations 2006 to require that the living wage is a part of any contracting authorities bid for a public sector contract.
Seek to influence the European Commission to remove any perceived barriers in EU Directives that prevent the inclusion of the living wage in procurement.
Establish a Living Wage Unit to advise on, promote and oversee the living wage in the public sector and in procurement.
In partnership with stakeholders, develop and produce a Code of Practice on promoting the living wage in procurement.

Scottish Labour MSP, John Park is also consulting on his private members bill that seeks to achieve the above objectives.

Government’s at UK and Scottish levels also need to recognise the broader economic case for an increase in real wages. The shift in incomes from workers to the very rich is a key cause of the longest and deepest recession in a generation. Low paid staff spend more of their income locally.

While we have made good progress in achieving the Scottish Living Wage in the public sector, nearly one in four Scots are still earning below that level. So more action is needed to extend the considerable benefits across Scotland.