Living Wage Week 2014

Since 2001 the living wage campaign has put over hundreds of millions back in to the pockets of the poorest paid. Tens of thousands have been lifted out of working poverty as a direct result of the Living Wage.

The annual living wage research report by KPMG, published today (Monday), estimates that 239,000 workers receive less than the living wage in the North East, which is one in every four workers, a number that rises to over one in three in places like Darlington and Blaydon.

For women the situation is particularly bleak.  In Hartlepool, Redcar and Cleveland and Darlington more than half of women working part-time are paid below the living wage.

Ministers celebrate new jobs. But what they do not say is that our economy has only become very good at creating low-paid jobs. It’s good that unemployment is not as high as many warned at the time of the crash, but creating poorly paid, insecure jobs is not good enough. This is the world of zero-hours contracts where no-one dares ask for a rise, because they are frightened of losing their hours.

Low-paid jobs are creating a tax shortfall. According to the Office for Budget Responsibility, the UK is facing an income tax shortfall despite rising employment levels. This, OBR say, is due to the numbers of people going into relatively low-paid work and the sharp growth in self-employment, much of which is poorly paid.

Paying the Living Wage makes good economic sense. The Impact of low pay on the taxpayer is huge: £4bn per year in ‘in work’ benefits. However, for every £1 spent in the private sector paying workers LW, 50p comes back to government in savings on tax credits and benefits. Research also shows that people who earn the Living Wage are more likely spend more and boost consumer demand. They are also less likely to go into debt than those who earn below the threshold.

I believe people deserve a fair day’s pay for an honest day’s work. But low pay is blighting the lives of hundreds of thousands of families in the North East. It is adding to the deficit because it means more spent on tax credits and less collected in tax.

We have the wrong kind of recovery with the wrong kind of jobs – we need to create far more living wage jobs, with decent hours and permanent contracts.

The fact is there are employers out there in the North East who can afford to pay living wages, but aren’t. It is now time for all responsible employers to commit to adopting this standard, which enables workers to earn just enough to be able to live a decent life.

So, I’m delighted that employers from the North East will be attending a living wage summit organised by the Northern TUC on the 6^th of November, supported by Catherine Mckinnell MP, Nestle’s HR Director, trade unions and the North East Chamber of Commerce.

Beth Farhat

Regional Secretary Northern TUC