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Living Wage – Evaluation of Special Initiative

Author: Trust for London, Citizens UK, CPC Cambridge Policy Consultants

This report by Cambridge Policy Consultants evaluates the effects of the £1 million plus invested by Trust for London since 2008 into the campaign by Citizens UK.

This investment has led to:

  • A step change in the living wage campaign. The number of employers committing to paying a living wage averaged 10 per annum in the first decade of the campaign. This increased to over 300 additional employers in 2013 and over 500 in 2014. The UK total in October 2014 was around 1,000.
  • It is estimated this generated £49 million in additional wages for 23,000 low-paid workers (by September 2013). Since this date the number of accredited employers has more than doubled, meaning the gains have significantly increased since then.

The report makes clear that community organising laid solid foundations for the living wage campaign and is critical in mobilising individuals to engage in activity. It was also integral to securing support from the Mayor of London and the Leader of the Labour Party. However, it was the creation of the Living Wage Foundation which delivered the step change. It was vital infrastructure, providing a platform to support the mainstreaming of the living wage and a process to formally accredit employers.

The concept of the living wage has now become mainstream, with considerable media coverage gained and support from a wide range of organisations. This greater public awareness has been important in engaging and accrediting employers and has been aided by the launch of an annual Living Wage Week.

Interestingly, the economic downturn may actually have helped the campaign. Increasing in-work poverty and the rising cost of living created greater awareness of the problem of low pay and an appetite for solutions such as the living wage.

There are a number of findings on the attitudes and effects on employers:

  • Employers are not yet swayed by the (bottom line) business case, but see alternative ‘soft’ business benefits such as improved staff morale and better relationships with employees.
  • Few accredited employers reported any significant challenges to accreditation. Affordability remains the main challenge particularly in sectors where low pay is a core part of the business model, and where progress has been difficult.
  • The nature of the sector matters and there is a need to be flexible to this. In industries where low pay is significant (such as retail) and where profits are low (such as social care) a more gradual and stepped approach may be needed.
  • Employers increasingly believe in the reputational benefits offered through living wage status. This has resulted in a change in campaigning. Originally the focus was on the reputational risk of not paying a living wage. This has now shifted to emphasising reputational benefits.
  • Ethically conscious customers are starting to pay attention to living wage accreditation. Around two-thirds of accredited employers thought it was a very or quite important reason for accrediting.

02 November 2014

Living Wage – Evaluation of Special Initiative