The Living Wage rises: But when and for whom?

The week commencing 5 November has been dubbed ‘Living Wage Week’ across Britain. For Camden staff who regularly use Outlook it has been hard to miss the fact that the Council’s spin doctors thought it appropriate to insert the logo for the week on staff’s email signatures along with the proud boast that ‘Camden is a London Living Wage Employer’. This recently acquired status comes some two and a half years after the Labour Party regained control of the Council with a manifesto pledge to introduce the London Living Wage (LLW).

Many Camden UNISON members will also have seen or heard media reports of Tory Mayor Boris Johnson’s press conference announcing an increase in the hourly rate for the LLW from the current £8.30 to £8.55. Most reports, however, will have omitted the fact that the higher rate will only come into effect for those 75 or so employers, which choose (or face a measure of informal compulsion from local authorities) to pay it from the spring of next year. There has been no uprating for 2012 despite housing and transport costs in the capital far outstripping the national headline rates for inflation, which has been running at between 2.5% and 3% in recent months.

Concretely, the LLW increase will mean that from April 2013 no worker directly employed by Camden Council should receive a basic rate of pay below £8.55 an hour. At present that means at least a handful of Council staff should receive a modest pay increase at the start of the next tax year. What it does not mean is any automatic pay hike for hundreds of workers on outsourced Council contracts, who currently earn less than £8.30 an hour. Scores of these, most of them cleaners employed on a contract awarded to the multinational ISS late in 2011, are still working for the national minimum wage, which rose by just eight pence to the princely sum of £6.19 an hour on 1 October. This means that for at least six months in 2013 the rate of LLW will exceed the level of the national minimum wage by more than 36%.

In contrast to the neighbouring borough of Islington, the LLW policy, as adopted by Camden’s Cabinet and the full Council earlier this year, will not apply retrospectively to any existing contracts where employers are paying below the LLW hourly rate. In fact, it will not be applied in practice to any contract prior to the end of the current administration’s term of office in early May 2014. For those workers whose jobs have been outsourced to for profit contractors or for that matter social enterprises such as GLL it is extremely unlikely that the policy will have any meaningful effect before 2015 at the earliest. Crucially, it is not at all clear that the Council will pursue the introduction of LLW to contracts for social care provision, where a combination of straightforward cuts and the previous government’s ‘personalisation agenda’ has fuelled a furious race to the bottom in a world of ‘zero hour’ contracts, no compensation for travel time and wage rates that often barely exceed the national minimum wage even in some London boroughs.

In short, the Council has agreed a statement of good intentions for the future rather than advanced an immediate action plan that addresses the scourge of poverty pay. The failure of local authorities, NHS Trusts and other public institutions to press ahead with the implementation of the LLW in the here and now means that hundreds of thousands of workers across the capital remain reliant on means-tested benefits and tax credits in order to achieve anything like a decent standard of living in Europe’s most expensive city. Ironically, the Living Wage Foundation, the very body that has accredited Camden as a living wage employer, has itself calculated that the true level for the LLW would be £10.45 an hour in 2012, stripping out the beneficial impact of Housing Benefit and tax credits, which will undoubtedly be squeezed hard by the Coalition government’s so-called welfare reforms over the course of the next year or so.

Finally, there seem to be some champions of the LLW, not least among Camden’s Labour councillors, who seem to see the LLW not simply as a floor but also a ceiling for the earnings of low-paid workers. This group includes the borough’s traffic wardens employed on the contract with NSL that is currently set to run until 2016. These Camden UNISON members, though they have by no means settled their dispute with this employer, have at least managed through organisation and determined struggle to secure an offer that is at least marginally better than the current LLW and indeed above the increased hourly rate for spring 2013 of £8.55.

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