By Rachel McEwen, Director of Sustainability for SSE
FAIRNESS is difficult to argue with. It’s something that galvanises politicians across the spectrum and resonates even with the smallest children. But it’s an entirely subjective concept; what seems fair to one might seem unfair to another.
There are times when an idea captures the imagination of the majority, its simplicity encapsulating the notion of fairness perfectly. For me, the real Living Wage does exactly that.
Accredited Living Wage employers – mine included – have helped more than 25,000 people get a pay rise in Scotland, to a rate of £8.45 an hour. But as the initiative in Scotland celebrates its third anniversary, there’s still work to be done.
We now know the majority of people who live in poverty live in a household where someone works; data from the Scottish Government last month showed that 70 per cent of children in poverty – 182,000 children – are in households where someone is employed. It seems particularly unfair that an increasing proportion of people in poverty earn their poverty, they don’t claim it.
Results of a survey published today by the Poverty Alliance, which promotes the real Living Wage in Scotland, found that one in three Scots on low incomes struggle to put food on the table. Among those earning below £14,000, 34 per cent were regularly skipping meals because of lack of money, 38 per cent had fallen behind with household bills and 46 per cent are so stressed about their finances that it is negatively affecting their work life.
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 five-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 that 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, with more than 780 employers supporting the real Living Wage, Scotland is the fastest growing region in the UK for accrediting employers. As the chair of the Scottish Business Leadership group for the Living Wage, I am proud to sit alongside employers like Standard Life, and KPMG, Glasgow Caledonian and Strathclyde Universities, Dundee City Council, Young Scot and a host of small businesses.
Thanks to funding from the Scottish Government, a team of seven works flat out to gain new accreditations from businesses. More than 75 per cent of accrediting employers are SMEs, many of which 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. One in three local councils in Scotland are accredited and include paying the real Living Wage as a consideration in their procurement strategies
The real Living Wage movement is a remarkable one that SSE is proud to be part of. It has, truly, made a difference to the lives of thousands of low-paid working people. What could be fairer than that?
For more information, please visit www.scottishlivingwage.org.
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