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What a difference the real living wage makes

Posted by SSE Business Energy on 25/04/17 14:01

Fairness is difficult to argue with as a concept. The pursuit of fairness galvanises politicians across the spectrum and is a concept that resonates even with the smallest children. There are times when an idea captures the imagination of the majority, its simplicity encapsulating the notion of fairness perfectly. The real Living Wage of £8.45 does exactly that and has the support of over 780 employers in Scotland and 3,000+ throughout the UK.

Rachel McEwen, the Director of Sustainability for SSE and the chair of the Scottish Business Leadership group for the Living Wage, representing SSE is proud the initiative in Scotland celebrates its 3rd anniversary this April, after funding from the Scottish Government to employ staff. The leadership group also includes employers like Standard life and KPMG , as well as SMEs like Utopia Computers and Voca; the universities of Caledonia and Strathclyde; Dundee Council; and the Third Sector with SCVO and Young Scot.

Accredited Living Wage employers have helped nearly 25,000 people get a pay rise in Scotland.

Yet, we now know the majority of people who live in poverty live in a household where someone works; data from the Scottish Government in March 2017 show 70% of children in poverty - 182,000 children- are in households where someone is employed. In other words, it is a myth that poverty relates to the ‘work shy’ or the idle. It seems particularly unfair the majority of people in poverty earn their poverty, they don’t claim it. And poverty doesn’t just mean lack of money, it means lack of participation in society. Poverty prevents a parent organising a birthday party for their 5-year-old, a family from having an evening out at the cinema or an avid football fan from attending a match. These are the things that make life worthwhile.

The real Living Wage is not the same as a statutory minimum wage (confusingly called the National Living Wage), which considers wider economic influences and the labour market as a whole. The central proposition of the real Living Wage is that it is a rate of pay calculated as one where you do more than just survive – it’s one based on the actual cost of living.

For real Living Wage employers, it is a voluntary choice to go above and beyond the statutory minimum, and there are many happy consequences: increased retention rates and employee engagement, and a boost to the company’s reputation.

Which is why SSE found the case made by real Living Wage campaigners highly compelling. It just didn’t seem fair some of our employees might earn a rate of pay that meant they would be on the breadline.

We were the biggest company at the time to join the Living Wage movement, the only energy company, and one of the first in Scotland. We increased the pay of 158 employees and we began to implement a ‘Living Wage Clause’ into our service and works contracts. If SSE employees were to receive a real Living Wage, it seemed unfair if contracted workers earned less. An estimated further 600 contracted workers receive a pay rise each year as a result of this policy.

We signed up because we believed it was the right thing to do, but in hindsight it had a profound impact in ways we had not envisaged. We expected those who received a pay rise to be pleased. What we hadn’t anticipated was how important this signal on fair pay would be to everyone else in the company. It lifted spirits and improved everyone’s morale.

Today, Scotland is the fastest growing region in the UK for accrediting employers with a team of seven working flat out to gain new accreditations from businesses. Over 75% of accrediting employers are SMEs, many of whom were already paying their directly employed staff above the Living Wage and thus could help push out the message to their supply chain. Today employers span the public, private and Third Sectors. And 1 in 3 local councils in Scotland are accredited and have paying the real Living Wage included as a consideration in their procurement strategies.

It is a remarkable movement that SSE is proud to be part of, one that has, truly, made a difference to the lives of thousands of low-paid working people. What could be fairer than that?

www.scottishlivingwage.org