For hundreds of thousands of employees currently 'enjoying' the minimum wage of £6.19 this would mean an extra £1.26 (outside London)… not a huge amount but for those subsisting on what the Labour party call "poverty wages" it will make an enormous difference.
The catering and hospitality industries have been notorious for too long as a low paid sector and in these difficult times of escalating rents and beer duties, increasing commodity and energy prices and the added burden of auto-enrolled pension schemes (which will add 3% to payroll) for some small businesses it may prove to be impossible to implement, but I would urge those that can to do so.
Here's a sobering (and shaming) figure for you... 85% of pub staff in the UK are paid less than the Living Wage.
The Living Wage Foundation cites these reasons for paying a Living Wage:
Good for Business
An independent study of the business benefits of implementing a Living Wage policy in London found that more than 80% of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25%.
Two thirds of employers reported a significant impact on recruitment and retention within their organisation. 70% of employers felt that the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer.
Good for the Individual
The Living Wage affords people the opportunity to provide for themselves and their families.75% of employees reported increases in work quality as a result of receiving the Living Wage. 50% of employees felt that the Living Wage had made them more willing to implement changes in their working practices; enabled them to require fewer concessions to effect change; and made them more likely to adopt changes more quickly.
Good for Society
The Living Wage campaign was launched in 2001 by parents in East London, who were frustrated that working two minimum wage jobs left no time for family life. Over 15,000 families have been lifted out of working poverty as a direct result of the Living Wage.
As I have said this may be impossible for many small businesses, none more so than the hard-pressed tenants of brewers and pubcos, so here's a suggestion for the likes of Punch and Enterprise. For any tenant that signs up for the Living Wage, how about rebating the differential between that and minimum wage by means of reduced rent?
For a pub employing 10 staff, say, this would be about £466 a week, or £24,000 or so … too much? How about going halvsies? £12,000 per pub to repair your reputation? Can't afford the cash? How about a free 11 gallon keg of lager per week? The tenant sells the lager at 100% profit and that goes to fund the Living Wage, surely you can afford that out of your massive supplier discounts? How about that for a bit of pre-redistribution?
And as for government, isn't it about time that the Living Wage became the national minimum wage? I, for one, can't understand the rationale of a Prime Minister supporting the aims of the Living Wage Foundation presiding over an administration that enforces a minimum wage that is 16% below what is actually needed to survive on or values the work one does based on age. But then again, nothing that Whitehall and Westminster does surprises me anymore. (By the way I bet that scrapping the beer duty escalator would go a long way to funding the Living Wage in pubs anyway).
A final word for publicans, if you are already paying the Living Wage or above, then bravo, if you aren't then seriously consider it after all as grandma said: "If you pay peanuts…"
Publican Sam is a licensed trade consultant. You can follow him on Twitter here