A new London living wage of £8.55 an hour has recently been announced by Mayor Boris Johnson. The rest of the UK may receive a £7.45 an hour wage. Championed by Labour leader Ed Miliband, his brother MP David Miliband and trade unions across the country, the ‘Living Wage’ is a voluntary scheme to which employers may be able to choose to sign up.
The Living Wage, first introduced in 2005, has benefitted nearly 12,000 UK workers. Legally, UK employers need to pay their staff the national minimum wage which is set at £6.19 an hour for those over 21, yet the Milibands are campaigning to make the higher-paid living wage the new norm.
Introducing a legally-endorsed living wage may be able to support in lifting millions of workers out of indigence. The Coalition agree with this in principle, although Work and Pensions Secretary Iain Duncan Smith said recently that government changes to in-work benefits might posibly increase peoples’ incomes anyway.
Under the government’s benefit reforms, in-work benefits would be replaced by a single universal credit and certain out-of-work benefits may be capped.
Speaking last week on BBC One’s The Andrew Marr Show, Iain Duncan Smith said: ‘We have a matter about in-work indigence and that’s the bit I’m trying to undertake. Universal credit, the new benefit, actually shifts 80 percent of the money down to the bottom 40 percent who are in work, and that will hugely boost incomes.’ He added: ‘It will then be possible for businesses to think about topping up a living wage.’
UK employers who sign up to the Living Wage scheme might be accredited with a ‘kite mark’ by the Living Wage Foundation. This might work in a similar way to the Fair Trade logo on products.