The Greater Manchester Chamber of Commerce has assessed the available evidence of the impacts upon business that are paying the Living Wage. The report, which was produced by Chamber research analyst Alexander Davies, brings together evidence gathered largely from the UK and the USA on Living Wage. For the most part, the collective research suggests that paying a living wage (as distinct from the National Minimal Wage) is beneficial as it aids in boosting productivity and staff retention.
However it is clear that for some sectors, most notably retail, health and social care and hospitality, where a large percentage of the workforce are paid low wages, the living wage could present considerable difficulties. This is especially pertinent in the case of social care employers who do not set the fees for the services in which they provide.
GMCC’s policy and marketing director Chris Fletcher has said ‘When we have asked our members about this subject, there is a majority that supports the idea of Living Wage. At our Autumn Assembly in October the vast majority of attendees voted to support the Chambers proactive stance on Living Wage. However Mr. Fletcher also stated “whilst we will support the Living Wage we also need to make sure we campaign on behalf of these businesses that do not and cannot operate their wages and pricing mechanism in a free way”.
The current voluntary of the Living Wage is £7.85 set by the Living Wage Foundation, but the foundation announced on the 30th of October that it was introducing a higher level for up to 2,000 employees across the UK in its scheme to raise the Living Wage to £8.25. From April of 2016 the government will introduce a new mandatory National Living Wage for workers aged 25 and above, which will initially be set at £7.20.
KMPG has indicated that six million employees across the UK are trapped in working poverty, as they currently earn less than the Living Wage. Their figures indicate that 23% of all employees now earn less than the Living Wage, whereas 22% earned less than the Living Wage last year.