Thursday, April 19, 2012

Shearer on inequality and the living wage

David Shearer gave a speech in Nelson today, in which he took aim at what should be the big theme of his leadership: inequality. He highlighted the fact that we have become a more unequal society, and that kiwis have not been rewarded for our increased economic productivity (instead, that money has been stolen by employers and exported by foreign corporations). And he suggested a solution: a living wage:

One emerging idea I’m interested in is the Living Wage.

It’s the amount a person needs to earn to provide for themselves and a family.

It’s started to catch on London since 2004 when the London mayor set up a unit that works out the Living Wage level each year.

Over time, as finances allowed, Council gradually began to pay the Living Wage level.

Now some businesses that contract with the Council have agreed to pay it too, whether they hire direct employees, contractors, or temporary staff.

The results have been encouraging.

More than four out of five employers believe the Living Wage enhanced the quality of the work of their staff.

Absenteeism fell by a quarter.

Two-thirds of employers said recruitment and retention improved.

The attraction of the Living Wage is that it’s a voluntary pathway, not enforced by law, to incomes above just the minimum wage.

A lot of businesses have found it’s a good way to show they’re actually good employers.

Even some of the giant global banks in London are signing up - like HSBC and Goldman Sachs.

Accountancy firm KPMG said that after they adopted the living wage, staff turnover dropped dramatically.

The idea now has cross-party support in the UK.

(As an aside, can someone teach Shearer to use paragraphs like normal people?)

Currently they're merely "looking at it". But this should be a core part of Labour's platform. National's policy of screwing down wages has left ordinary kiwis in poverty, struggling to make ends meet. OTOH, the fact that its voluntary means that in our business environment, with a business leadership hostile to workers and interested primarily in preserving their own position, progress is going to be very slow. It could be sped up by making paying a living wage a requirement for all public sector organisations, and for all government contracts. But even then, we're looking at a slow process for ensuring basic living standards. Simply raising the minimum wage would be faster, and reinforces the principle that the minimum wage should be a living wage.