Dai Powell's blog
Dai Powell is HCT Group's Chief executive. Dai has been Chief Executive since 1993, leading the organisation as it has grown from a small Community Transport provider into an award-winning, large-scale social enterprise. His blog explores ideas on social enterprise, transport and related issues. Always forthright, Dai’s views are his own and do not necessarily reflect the position of HCT Group.
I don’t believe in the Living Wage!
There, I’ve said it. I will be condemned now and forever more…
But seriously, I don’t mean that people should not be paid a living wage. It’s the Living Wage campaign that I have a problem with.
Being a Living Wage employer is now a badge of honour, but it feels like the same badge of honour that we had in Hackney in the 1980’s when we were a Nuclear Free Borough – a nice middle class invention but, in reality, it doesn’t mean much.
Last week I was in the reception of a professional services company. On the wall, among the awards, the most prominently displayed ‘badge’ was ‘We are a Living Wage Employer’. Perhaps unsurprising at a professional services company in London! If they did not pay the Living Wage they would not be able to recruit, simple as that. But the badge of honour makes them feel good… then the Minimum Wage cleaning contractor comes into the reception and it all seems like so much posturing.
In this context, what does the Living Wage really mean? Is it what you pay your staff? Is it what your sub-contractors and suppliers pay their staff? Is it what they pay their contractors? If you are an organisation committed to social justice, it’s just not good enough to wear the badge and not consider these issues.
Rather than campaign for a voluntary Living Wage, what we need is a much greater campaign for a realistic Minimum Wage. The Minimum Wage should be the Living Wage, for what is the point of having a Minimum Wage if it does not enable people to live a decent life?
A Minimum Wage set at Living Wage levels would address some of the real practical problems we’ve encountered as we’ve tried to work towards the Living Wage at HCT Group. We operate bus services on tender from Local Authorities. In some areas where we work, particularly outside London, the standard wage for staff on these contracts is at the current Minimum Wage.
If we were to stick to the principle that says we are a Living Wage employer, we’d stand very little chance of winning work in these areas. We’d be able to feel nice about ourselves, be open to no criticism and bask in a comfortable glow. But here’s the thing - the work would still be done, but by a competitor paying the Minimum Wage. No one is better off.
Alternatively, what we try to do is propose paying, for example, 50p more than Minimum Wage but below Living Wage; what we think a contract can bear. We then have a much greater chance of winning the work and, if we did, then the people who do the work are £20 per week better off. No badge, no glory, but the end result is that the people at the sharp end are better paid than they would have been by us pursuing the current voluntary Living Wage.
This situation is absurd and it couldn’t happen if the Minimum Wage was a Living Wage – it is the low level of the Minimum Wage that is the real issue and the rest is bullshit.
It is wrong to pretend that being a Living Wage employer allows us to wash our hands of the real issue. We have an election coming up in a few months - if the Social Enterprise movement really does want social change, does believe in a fairer and more just society then we should all ensure that a real increase in the Minimum Wage is our greatest ask to politicians.