When George Osborne announced his new minimum wage rate of £7.20 it seemed a glimmer of hope amidst a challenging budget. The cuts to tax credits could leave many low-paid workers actually worse off, but at least employers are being asked to play their part in moving Britain away from a low-wage economy.
But there’s a problem. Tom Skinner, Cordinator of the Greater Manchester Living Wage Campaign, explains.
The problem was the name – he called it a living wage. This is demonstrably wrong – a living wage is calculated based on the cost of living, whereas Osborne’s announcement was based purely on what he believes the market can afford, so it remains a minimum wage, albeit a slightly higher one than was expected. See the Living Wage Foundation’s response for more depth and context.
This will make it harder to show the importance of the Living Wage – already national media reports have taken the government line and badly bungled their reports on good Living Wage stories such as Ikea’s recent announcement.
This requires us to redouble our efforts to engage businesses, consumers, workers and citizens about the value of a Living Wage that is based on the cost of living.
Later in the year, Church Action on Poverty will issue an updated briefing for the many churches which have committed to pay a genuine Living Wage.