Thursday 25 February 2010

Is a 'living wage' the right answer to low pay?

The political left is defined by the causes we fight for. And the living wage campaigns, in London and elsewhere, have been among the most resonant, high profile and successful campaigns on poverty and low pay in the last decade.

But is the "living wage" the best way to challenge low pay in our society?

The London living wage campaign states its aim as:

"everyone in work is paid enough to provide adequately for themselves and their family. The Living Wage campaign aims to make poverty wages history"

A new Fabian briefing paper, The "Living Wage: the right answer to low pay?" (PDF file) by Fran Bennett and Ruth Lister summaries the long history of living wage campaigns, and interrogates the case for making the "living wage" a core demand of advocacy on low pay.

The authors express several concerns "if the problem of low pay is conceptualised primarily at the failure to pay a living wage".

The authors both have stellar reputations as academic experts on poverty issues with a long track record of civic engagement in anti-poverty campaigning. Both were also members of the Fabian Commission on Life Chances and Child Poverty. So this is clearly a constructive 'inside the tent' challenge seeking to engage campaigners in a debate about how best to challenge low pay and poverty. The briefing reports and builds on an earlier seminar hosted by the Child Poverty Action Group and supported by the Joseph Rowntree Charitable Trust, involving campaigners, academic experts and others to scrutinise this issue.

Bennett and Lister conclude that:

Connecting low pay with family subsistence, and with employers' responsibilities to maintain a workers family may not provide a strategy which is either dynamic or sustainable. Seeing low pay through the lens of household poverty - whether defined as a minimum income standard, or a relative poverty threshold - can only ever provide a partial solution, because it does not place inadequate wage levels in the context of the unequal structure of labour market rewards and the persistent under-valuation of certain forms of paid and unpaid work.

There are a number of different strands here: feminist concerns that the 'living wage' as a family wage continues to implicitly rely primarily on a 'male breadwinner' model; and that the living wage challenge may also seem to situate responsibility to pay a 'social wage' for work - such as caring - with employers, rather than with government and society collectively.

But while living wage formulas discussed in the paper tend to come out at an average of around £9 a hour, successful employer-facing campaigns have usually aimed at a lower figure. So the success of living wage advocacy depends on support for a broader range of policy measures, such as tax credits to increase take-home pay through redistribution, effectively topping-up or subsidising wages through state support.

The living wage campaigns have been most successful in London, where housing and childcare costs are higher, but where there is no London weighting in the national minimum wage.

The paper voices several cogent arguments about the limits of the "living wage" idea in addressing low pay. Yet it acknowledges the point that the living wage is "the only game in town", or certainly that which has proved most effective as a rallying point for mobilisation. This surely has much force too.

David Metcalf argues that "the Living Wage is best viewed as a rallying cry to boost the pay of those towards the bottom of the wage league table".


Personally, I remain somewhat undecided. It feels to me that one might agree with this critique of the "living wage" concept as a philosophy of fair pay, yet still want to support the campaigns, and so keep using the 'living wage' slogan too.

And these Living Wage dilemmas offer just one example of a range of possible tensions in how to link ideas, policy proposals and rhetorical advocacy to bring about political change. Successful campaigning needs to link these three levels in a coherent way, but a fair case might be made for a pragmatic element of fudge.

For example, I would argue that equality is the core value of the Labour party. But I think that "fairness" is the better public banner to march under in a campaign for a fairer and more equal society, so long as there is a sufficiently robust account of what fairness demands to make significant progress towards more equal life chances possible.

But there are limits. This could not be a case for pure pragmatism about what resonates best with the public. It is easy to think of traditional campaigning messages around poverty, at home and abroad, which are eye-catching but disempowering, in othering the poor and making them passive recipients of paternalistic support. Here, large charities may face some real trade-offs, and have become much more aware of these in the last 25 years.

The dilemmas around the "living wage" strikes me as being in a different category from that. A closer analogy might be with "drop the debt" campaigns on international development. Such a call certainly does not exhaust the scope of what is needed for international justice. But it may be a successful rallying cry, and that might well be used to engage a broad audience and offer a starting point for an educative campaign on a broader agenda.

But it might not. A further example of these advocacy dilemmas might be Labour's advocacy of progress on pensioner and child poverty. These were the most popular causes for redistribution, but was that because they ducked, and perhaps reinforced, public attitudes about the deserving and undeserving poor?


It may well be worth thinking more about why the "living wage" idea resonates, if we might want to emulate that success with other campaigns on low pay and other poverty issues.

It seems to me the Living Wage campaigners were successful in doing two things which are important to successful campaigns: they lowered the barriers to getting involved in a low pay campaign, and they gave those involved reasons to stay mobilised over time.

Firstly, while the "what" and "how" of a living wage are complex issues, this can be articulated as a simple fairness argument which seems easy to support and difficult to oppose, even for those ike London Mayor Boris Johnson who would often be opponents of egalitarian measures. No great theoretical argument needs to be won to get across a broad sense that this is a pro-fairness campaign. Rather, it will only be those strongly committed to an opposing ideological viewpoint who are likely to strongly challenge that.

Secondly, by making demands of a range of different actors, it is also possible to secure progress and visible victories. This means that those involved see themselves making a difference, and so are motivated to do more, while others join in too.

That is much harder on the broader argument for greater social equality.

So the "living wage" slogan may well be the most powerful way to secure better pay for some of the worst paid workers - and many of those advocating the slogan may well not intend the slogan to carry too much weight in representing a deeper philosophical argument about equality and fair pay.

So perhaps the right long-term test of living wage campaigns might be this: Can they also persuade those they mobilise to engage with broader equality debates?

Or, in trying to do so, would they lose the appeal which makes them effective?

* The "Living Wage: the right answer to low pay?" by Fran Bennett and Ruth Lister is published as a Fabian freethinking paper. The Fabian blog Next Left would welcome further offers of posts responding to the paper and the arguments for and against the 'living wage'.


donpaskini said...

Good commentary. I think Fran and Ruth's argument does slightly run the risk of letting best be the enemy of good, and I don't think that anyone (certainly not London Citizens) sees the living wage as being sufficient on its own to tackle poverty. That's why, for example, they run campaigns like CitySafe and Strangers into Citizens, and indeed the Citizens' Assembly picked up a number of other demands aimed at government.

I just don't believe, either, that campaigning for a living wage crowds out campaigns for a social wage - my experience is that once people have won on one thing, their ambitions grow and they are motivated to address other issues. I'm sure, as well, that the majority of workers who have benefited from the living wage are women.

One point you make that I'd like to pick up is that the living wage has been by far the best anti-poverty campaign in recent years at mobilising people. It's worth comparing with the End Child Poverty campaign, which was fantastically good at lobbying, but which when it came to the crunch could only get 9k people out on the streets to back its demands up to government.

(This is not a criticism of people involved in ECPC - indeed arguably insider lobbying worked better over the past decade than grassroots mobilisation, but campaigns which rely on lobbying are inherently more vulnerable to changes in government).

Anonymous said...

Is the living wage an answer to low pay? - yes, of course, because it raises pay a little higher (at least until inflation swallows it up).

Is the living wage the answer to poverty and inequality - no, not at all, because it merely tinkers round the edges of servitude, and negotiates better terms rather than dealing with the fundamental problem.

I wrote on LabourList about this a couple of weeks ago - I hope you don't mind me posting the link -

I'd be interested to know what you think...

_______ said...

The creation of a universal housing cost credit assigned to every working citizen, funded through scrapping various tax relief/allowances schemes, would be a far more realistic, and economically sustainable way to end in-work poverty.

Increasing the minimum wage too much can make labour market's less flexible. Applying the principles of flexicurity to the problem of in-work poverty seems to provide the answers.

Bascially, the middle class should pay more tax to fund a universal flat rate housing cost credit for every worker. The housing cost credit would be worth as much as the difference between the current minimum wage and the wage needed to keep a worker out of relative poverty. People in labour need to start rally for this, a Tobin tax could fund it many times over. This should represent part of 'beyond New Labour' and renewing the welfare state.

Sunder Katwala said...

Thanks for the comments.

This was Michael's link to his LabourList piece, arguing that

"Now of course, we all know the background behind the idea: the shocking levels of inequality, the people struggling to get by, working huge numbers of hours, living in a heavily taxed world, and trying to do it all on a terribly low wage. And we can all decry the poverty, rail against the injustice, and commit earnestly to seeking a way to resolve the situation. But it seems to me that, if that is really your goal, then the Living Wage is a cop-out. It is a convenient non-sequitur which makes a few people feel a little better about themselves, whilst having little effect on those at the bottom who find their new handout immediately swallowed by the inevitable inflation that follows it".

Robert said...

I think what we need to do is round up all the scroungers the disabled the sick and the near dead get rid of them, gas them if you like, better still cut the benefits, then you can use all that money to give the low paid extra benefits, until you get fed up them you can gas them allow more Immigrants in when your sick of them do the same helps keep the population down as well.