Iain Russell urges greater Living Wage commitment following Smith Institute research

A report published this month recommends that all UK local authorities become accredited Living Wage employers, which means committing to paying staff, including contracted workers, at least the real Living Wage – a rate based on the cost of living, and not just the Government minimum.

In Scotland, the good news is that 16 out of the 32 local authorities are already accredited as Living Wage employers. At Living Wage Scotland our goal is to have all 32 accredited.

Evidence is building that payment of the real Living Wage is not just 'the right thing to do' for low paid workers, but it can also help create more inclusive local economies and deliver additional annual economic growth.

The report, The Local Living Wage Dividend – published by the Smith Institute – is an analysis of the impact of the real Living Wage on ten city regions throughout the UK, and includes Glasgow City Region - one of the UK’s largest - comprising eight local authorities, five of which are accredited Living Wage employers.

The research asks, what would happen locally if low paid workers moved up to the real Living Wage?

The figures for Glasgow City Region are compelling. If just one quarter of low paid workers received a pay rise to the real Living Wage, the local economy would grow by £27 million. This local Living Wage dividend could increase to £49m, assuming a deal to split the public savings and additional tax revenue between the Treasury and the local region.

Workers would benefit on average by £1,180 (£770 after tax and benefit reductions).

The evidence points towards greater productivity, increased local spending, higher tax revenues, benefits savings and reduced pressure on public services.

Local authority commitment to Living Wage accreditation is only the start. Their influence and leverage over the local economy has the potential to reach far beyond the organisations’ pay and procurement policies.

The report encourages accredited local authorities to expand the take-up of the real Living Wage by working in partnership with other local ‘anchor institutions’ and key employers synonymous with the local area.

Increasing the number of accredited Living Wage employers should also be integral to local economic development strategies, with skills and business support services designed to encourage movement towards Living Wage accreditation. The number of local Living Wage accreditations and the corresponding number of low paid workers benefitting from an increase to the real Living Wage should be measures of economic improvement.

Paul Hunter, deputy director of the Smith Institute says: “The real Living Wage offers local authority policymakers one way of turning some of the rhetoric around inclusive growth into a reality.”

The recommendations speak to every local authority in Scotland, and the message is unequivocal:

To maximise Living Wage dividends, deliver economic growth, address in-work poverty, and raise living standards, every local authority must allocate resources, commit to paying the real Living Wage, and drive inclusive growth beyond their organisation.

The first step is to accredit as a Living Wage employer.

Iain Russell is an accreditation officer for Living Wage Scotland.