Chamber report backs Living Wage
GREATER Manchester Chamber of Commerce has assessed the available evidence on the impacts on business of paying the Living Wage.
The report produced by Chamber research analyst Alexander Davies brings together evidence gathered largely from the UK and USA on Living Wage.
For the most part, the collective research suggests that paying a Living Wage (as distinct from the National Minimum Wage) is good as it helps boost productivity and aids staff retention.
However, the paper makes it clear that some sectors 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 for businesses.
This is especially pertinent in the case of health of social care employers who do not set the fees for the services they provide.
GMCC’s policy and marketing director Chris Fletcher said: “When we have asked our members about this subject, there is a majority that supports the idea of a Living Wage.
“At our Autumn Assembly in October, the vast majority of attendees voted to support the Chamber’s proactive stance on Living Wage but sounded one note of caution about certain sectors’ inability to easily pay this without harmful effects.
“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 currently £7.85, set by the Living Wage Foundation.That organisation announced on Friday it was introducing a higher level for up to 2,000 employers across the UK participating in its scheme to £8.25.
From April 2016, the government will introduce a new mandatory National Living Wage (NLW) for workers aged 25 and above, initially set at £7.20 – a rise of 50p relative to the current National Minimum Wage (NMW) rate.
The adult NMW rate is currently £6.70. From 1 April 2016 the premium will come into effect on top of the NMW, taking the National Living Wage to £7.20.
The NMW will continue to apply for those aged 21 to 24, with the premium added on top for those aged 25 and over, taking the total hourly rate to the National Living Wage.
Meanwhile, KPMG has indicated that six million employeers are trapped in working porvery as they earn less than a Living Wage.
Its figure indicates 23% of all employees now earl less than the Living Wage – up from 22% last year.
