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The Living Wage: a business investment with a good return!

Posted on 19th March, 2015 by Lincoln Against Poverty

Here’s a letter from City of Lincoln Council Leader Ric Metcalfe about the Living Wage and why he believes it is good for business.

As part of an ambitious economic growth plan, the city council has just launched a campaign with business partners to persuade all employers in the city to pay the Living Wage.

A non-statutory hourly pay rate determined by an evidence based calculation of what income is needed to meet a minimum standard of living for employees. Up-rated annually, it is currently set at £7.85 per hour.

At national level, the Living Wage enjoys all party support, with both the Institute of Directors and the CBI now calling for improved pay levels to help get demand going in the economy.

All of the evidence shows that payment of the Living Wage pays dividends to businesses through improved recruitment and retention, higher levels of productivity, reduced sickness absence and a more highly motivated and satisfied workforce.

As lower income groups spend most of their income in the local economy, the benefits to local businesses also come from the increased spending power to buy more of their goods and services in the city.

At present there is a very significant public subsidy provided through the tax and benefit system to employees on low pay, not to mention the potentially long term impact, and costs to the public purse of low income on educational attainment and ill health.

It is also true that many modern businesses recognise the reputational gains and potential competitive advantage of being seen to be a “good employer” given increasing expectations nowadays among consumers that businesses should adhere to high ethical standards including paying fair wages to its employees.

The majority of households in Lincoln who are in poverty, (measured by having an income of less than 60 per cent of national average household income), have at least one member of the household who is in work. The city has a significant level of in-work poverty.

The thrust of our current growth strategy is to try to get employment growth going, more and better paid jobs than we have at present and a strong sectoral mix so we have the right balance of work opportunities to suit the whole range of skills of our local workforce.

A Living Wage Forum has now been established involving business, public sector and third sector organisations and the momentum is growing as more employers register as Living Wage Employers.

Over the next few weeks we will be conducting a survey among businesses to try and identify employers who are already paying the Living Wage and signing them up to a register.

We will also want to engage with businesses that have doubts about paying the Living Wage and to understand the obstacles as they see them.

We will be asking all organisations who purchase goods and services to consider introducing the payment of the Living Wage as a consideration in their procurement activity.

We will periodically publish the list of businesses that are Living Wage employers and encourage the use of the Living Wage logo on their communications material.

I strongly believe the Living Wage is a business investment with very good returns for business.

It is, I believe, something whose time has now come!
Cllr Ric Metcalfe
Leader of the Council
City of Lincoln Council


To visit the Living Wage section of this website, please click here.