4 reasons why 5,000 businesses are paying the real Living Wage

Living Wage Foundation

This blog post has been produced for the Greater Birmingham Chambers of Commerce as part of the 2019 Growth Through People campaign.

Growth Through People is the Chamber’s annual campaign aiming to help local firms boost productivity and grow through improved leadership and people management skills. In 2019 this involves 15 free events, workshops and training sessions taking place between 2h February and 26 March, along with thought leadership videos and blog content such as this.

Thanks to our sponsors – the University of Birmingham, Aston University, Curium Solutions and CIPD - all events are free to attend. Interested readers can find out more here.

Demonstrating responsible business leadership can be challenging when you still want to remain competitive, and we’re all time poor. So what better way than finding something that is good for your employees, good for society, good for the local economy and good for your business?

Over 5000 employers in the UK are benefitting from choosing to go further than the government’s minimum and pay all their staff a real Living Wage. Unlike the government’s national minimum, or National Living Wage, the real Living Wage is an independently calculated, voluntary rate of pay that’s based on the actual cost of living. Here in Birmingham that’s £9 an hour.

So why are the likes of IKEA, Heathrow Airport, LUSH, Brewdog, Unilver and Liverpool FC making sure all their staff earn a real Living Wage?

  1. It’s good for business

93% of Living Wage Employers tell us that they have experienced direct business benefits as a result of being accredited. These include higher retention rates, lower recruitment costs, higher staff motivation and increased brand value.

Patrick Langmaid from Mother Ivey’s Bay Holiday Park on their experience of paying the Living Wage: “In a flash recruitment had become so much easier, with seasonal staff choosing to return, meaning our investment in training was working better for us. And, the stability in our workforce created more consistency across customer service, helping ensure a better guest experience.” 

  1. It’s good for employees

When I speak to those people earning less than the real Living Wage they talk about skipping meals to pay for school shoes or having to work 2 or 3 jobs just to make ends meet. In contrast, earning the real Living Wage can mean the world to employees.

A worker from National Express told us that “It’s refreshing to have an employer who gives me the feeling they want to invest in me, my health, my wellbeing and my future – and not just get labour for the cheapest outlay in the short term. This makes me feel valued and in turn I take more pride in being a part of the team at National Express”

  1. It’s good for society

No-one should have to do a hard day’s work for less than they can live on. If working people can’t make ends meet on full time hours the cost will be borne by the individuals, tax payers, the NHS and Government. People experiencing in-work poverty are more likely to develop mental and physical illness.  A survey carried out by the Food Standards Agency  found that one in four low-income households struggles to eat regularly or healthily because of a lack of money. Our own study found that 71% of parents earning below the real Living Wage worry so much it affects their day to day lives.

Studies in a 2014 report from Public Health England and the UCL Institute of Health Equity have suggested that the introduction of a Living Wage is associated with significant improvements in life expectancy, depression and activity-limiting illnesses.

  1. It’s good for the local economy:

Here in the West Midlands nearly 1 in 4 people earn less than the real Living Wage. Our research with the Smith Institute told us that if we uplifted just ¼ of those workers to the real Living Wage, the boost in spending and taxes could inject a further £95 million into the local economy.

Sadly though, there are still only 58 Living Wage Employers headquartered in Birmingham. This is having a detrimental impact on individuals, families and the local economy.

The Living Wage Foundation recognises and celebrates the businesses who choose to pay these rates to all their staff by awarding them with the Living Wage Employer Mark. See more about accreditation and our network here. If you’d like to demonstrate responsible business leadership by accrediting as a real Living Wage Employer, or if you’d simply like to find out more, please get in contact.

Lucy Bannister
Programme Manager for the West Midlands
Living Wage Foundation