Good progress on the Scottish Living Wage, but much more to be done

The Scottish Living Wage is the real living wage – the UK government just hijacked the brand!

The new rate of £8.45 is a welcome increase for many thousands of low paid workers. Also congratulations to public sector ferry operators Calmac, for their Scottish Living Wage Champions award.

The start of Living Wage Week is an opportunity to remind everyone that the real living wage is based on actual costs of living. While any increase in the national minimum wage is welcome, it remains a flawed approach - not least because the 'living wage' element only applies to the over 25's. Shops don't differentiate pricing for those under that age.

I was chairing a session at today's Living Wage Expo that highlighted the difference between the two approaches with experts from the Resolution Foundation and the Centre for Research in Social Policy. The ‘real’ Living Wage movement requires strong advocates who can offer clear differentiation against rates that are not based on cost-of-living. 

While there is a welcome cross party consensus on the real living wage, there is a more positive approach in Scotland. 

As First Minister Nicola Sturgeon said:

“For business, paying the Living Wage makes sense - it’s an investment in people and all the evidence shows it leads to increased productivity and reduced staff absence and turnover, while sending a strong signal to customers about fairness. Yet we also know around 20 per cent of Scotland’s workforce earn less than the Living Wage. With low pay one of the main drivers of in-work poverty, it’s vital that employers who can pay the real Living Wage do so."

The Scottish Government has made an important commitment to pay the living wage for adult care workers, even if the implementation has been partial and muddled. They should make a similar commitment for childcare workers, 80% of whom are paid below that level. The proposed voucher scheme won't deliver a well-trained and fairly paid workforce. Both of these sectors rely heavily on government funding and therefore government has the levers to make real progress on the living wage.

As TUC General Secretary Frances O’Grady said today:

 “The fight for decent pay won’t be won just by employer goodwill, however. We need strong unions who can negotiate with employers and win fair pay for their members, along with a rise in the government’s minimum wage."

Wages are also not the whole story. Bad employers cut other terms and conditions, like holidays and sick pay, to meet the statutory minimum wage. That's why the broader fair work approach in Scotland is so important. Again, the Scottish Government has taken a positive approach through the Fair Work Convention and the Labour Market Strategy. The challenge is to use the levers of government to deliver on the worthy ambition in these approaches.

Living Wage Week is an opportunity to promote the Scottish Living Wage. Today's conference heard some inspiring stories from workers and employers on the benefits for individuals and businesses. Scotland has made good progress, but there is much more to be done.