A low pay epidemic is sweeping the North East, it is claimed, as new figures reveal one in four are paid below a living wage.
A report released today by KPMG estimates that well over a quarter of a million workers receive less than the £7.65 per hour experts say is needed for the basic cost of living in 2014.
The TUC claim that some businesses can afford to pay the living wage, calculated by Centre for Research in Social Policy, but are refusing to do so – and the regional economy is suffering as a result.
The North East Chamber of Commerce, however, says there has been progress and last week published a survey which shows 35% of firms increased workers’ pay above inflation last year.
Northern TUC Regional Secretary Beth Farhat called for a bigger commitment. She said:
“People deserve a fair day’s pay for an honest day’s work.
“But low pay is blighting the lives of hundreds of thousands of families in the North East. And it’s adding to the deficit because it means more spent on tax credits and less collected in tax.
“We have the wrong kind of recovery with the wrong kind of jobs – we need to create far more living wage jobs, with decent hours and permanent contracts.
“The fact is there are employers out there in our region who can afford to pay living wages, but aren’t.
“It is now time for all responsible employers to commit to adopting this standard, which enables workers to earn just enough to be able to live a decent life.”
Catherine McKinnell, Labour MP for Newcastle North, will speak at the Living Wage Summit at Newcastle’s Centre for Life on Thursday as part of a week of action on low wages by the TUC.
Newcastle City Council became the first to introduce a living wage and the authority boosted this to £7.55 in April, and South Tyneside has announced it is to follow suit. Councils in Gateshead, Northumberland and North Tyneside all set up working groups to explore the issue earlier this year.
Ms McKinnell, Labour’s Shadow Economic Secretary, said:
“People in the North East are really struggling with the cost of living crisis and with around one in four workers in our region paid less than the living wage, more must be done to tackle the problem of low pay.
“Finding ways to support and encourage employers to pay the Living Wage is a major part of that.
“It is fantastic to see more businesses and Labour-run councils in our region seeing the benefits of adopting the Living Wage, but it is important that we continue to demonstrate the value, both to employers but also to our region as a whole.”
The Living Wage Summit will also hear from local authorities, trade unions, voluntary and community agencies, such as the Child Poverty Commission and employers.
Speakers include James Ramsbotham, chief executive of the North East Chamber of Commerce, Sarah Vero from the Living Wage Foundation, Reverend Simon Mason and Matt Stripe, HR director for Nestle, who are a committed Living Wage employer.
Source – Newcastle Evening Chronicle, 03 Nov 2014
Oone thousand low-paid council workers in South Tyneside are today a step closer to receiving a ‘living wage’.
The move – recommended by an independent commission – leaves South Tyneside Council needing to find £700,000 to cover its wage bill if it presses ahead with the plan next year.
The commission has recommended South Tyneside pays its lowest paid workers a minimum of £7.65 an hour – £1.34 above the national minimum wage of £6.31 an hour.
This would help about 1,000 cleaners, school lunch supervisors and catering assistants in schools, residential homes and leisure facilities – 95 per cent of whom are women.
It would mean those workers, who are paid £6.54 an hour, would see their hourly rate rise by £1.11.
It is highly unlikely any change will come into force before April next year – because the council’s budget for the financial year has already been set.
The decision was labelled “historic” today by Merv Butler, the branch secretary of Unison South Tyneside, which has long campaigned for the introduction of the living wage.
Mr Butler would favour an immediate introduction of the increase but, if that’s not possible, he will be pushing for a “stepped approach” – with phased rises in the rate paid per hour over the next few months.
“This is an historic day for Unison. We have campaigned long and hard for the council to introduce the living wage. The recommendations of the commission bring that a massive step closer.
“Our task now is to get the council to bring in the living wage as soon as possible, and we have a clear plan on how they can do this.
“The report shows that 1,195 job holders are paid below the living wage and nearly 95 per cent of these are women.
“This proposal will make a real difference to our members. It will put money into the local economy as well.”
Coun Ed Malcolm, the council’s lead member for resources and innovation, will now work over the coming months with finance officers to look to identify funding for the change.
“As a council, we are committed to social justice and trying to bring real change to the lives of people in South Tyneside.
“This is why we welcome the commission’s report into the impact of introducing the living wage in the borough.
“There is a compelling case to introduce a living wage because it brings dignity and pays families enough to enjoy a basic but acceptable standard of living. However, it is important that we consider this very carefully in the context of ever decreasing budgets and our commitment to protecting vital services in South Tyneside.”
Coun Joan Atkinson, the council’s lead member for children, young people and families, described the living wage as a “priority” and a chance to take struggling families out of poverty,
“It is going to be hard.We don’t have a hidden pot of money but, through innovative measures savings are being made. This is a priority and we need to find a way of funding it.”
Coun Malcolm added:
“We would like to thank Professor Keith Shaw and his commission members for the wealth of work they have done on this issue.
“They have produced a very comprehensive report exploring what we can do as an employer to lift more people out of low pay and support local families.”
Source – Shields Gazette, 05 Sept 2014
Hartlepool has the region’s highest proportion of women working part-time and earning less than the living wage according to the data provided by the TUC.
More than half of town women – 55.9 per cent – are paid below the living wage, analysis of figures from the House of Commons Library show.
And TUC officials say for every pound earned by men full-time, women working part-time earn just 66p.
The union says one of the main reasons for this huge gender pay divide is the large concentration of women doing low-paid, part-time work.
The living wage – the pay rate needed to let workers lead a decent life – is currently set at £7.65 an hour.
The national mininum wage is lower, at £6.31 an hour.
The town fares the worst out of the whole of the North East for ensuring fair pay for females.
Pamela Hargreaves, chair of the Hartlepool branch of the Federation of Small Businesses, said:
“I think from a small business perspective, while all the businesses I’m sure would dearly love to be able to pay the living wage, because it’s the right and proper thing to do, potentially it can put quite a strain on their finances in this difficult economic climate.
“I think as the economy picks up and businesses begin to thrive again, I think it’s certainly an aspiration all businesses should aim to do.
“But from a social perspective, absolutely all employers should be striving to pay the living wage.
“I also know from running a charity, Hartlepool Families First, whilst it’s an aspiration it can be difficult to achieve it.”
North Tyneside has the region’s lowest proportion of women working part-time for less than the living wage at 37.9 per cent.
Nationally, Watford has the lowest proportion, with 16.9 per cent.
Union officials say the situation in North Tyneside shows what can be done when unions, employers and campaigners work together to tackle low pay.
Ms Hargreaves, also a town councillor, addded:
“What Hartlepool needs to do is examine why it has the highest proportion in the region.
“If North Tyneside has a model that’s working, we as a town should be looking at the model and adopting some of those practices so we can make a dent in those figures.
“It’s clearly across the board, from women director level to part-time roles – women don’t seem to be treated fairly and valued as much as male counterparts.”
The TUC wants to see more employers paying the living wage, to help tackle “in-work poverty” and close the gender pay gap.
It believes local authorities should lead by example by becoming living wage employers themselves.
Last September, Hartlepool Borough Council became a Living Wage authority which meant 405 council employees saw their pay rise from £6.45 to £7.26 an hour.
Authority chiefs are also encouraging firms that have contracts with the council to folllow suit.
The union also wants to see more jobs advertised on a part-time basis, ending the requirement that women have to be in post for six months before they have the right to request flexible working.
TUC Regional Secretary Beth Farhat said: “In-work poverty is growing across the North East and it’s often women who bear the brunt of low pay.
“The living wage was created so that work can provide staff with a basic standard of living.
“But in places like Hartlepool, the majority of women working part-time are earning nowhere near this.”
Source – Hartlepool Mail, 29 Aug 2014
A Wearside youth project has pledged to pay workers the Living Wage.
Staff at the Youth Almighty Project, based in Silksworth Community Centre, Sunderland, will now be paid £7.65 per hour – higher than the national minimum wage of £6.31.
The Living Wage is an hourly rate set independently and updated annually. It is calculated according to the basic cost of living, using the “minimum income standard” for the UK, which is based on decisions made by the public about what it takes to make ends meet.
Coun Phil Tye, chairman of the project, said: “It was vitally important, due to the work that we do, to demonstrate not only to our staff, but for the people that use our services, that we respect our employees and recognise that the Living Wage is important.”
Employers choose to pay the Living Wage on a voluntary basis.
Living Wage Foundation director Rhys Moore said: “We are delighted to welcome the Youth Almighty Project to the Living Wage movement as an accredited employer. The best employers are voluntary signing up to pay the Living Wage now.
“It is a robust calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay. We have accredited more than 700 leading employers, ranging from independent businesses to well-known companies.”
The project works with young people aged between eight and 19.
Source – Sunderland Echo, 22 Aug 2014
An attempt to force the North-East’s biggest council to pay the Living Wage by next spring has failed.
Eighteen months after Labour-led Durham County Council agreed to look into introducing the minimum pay level, currently £7.65 outside London, it is yet to be adopted.
At today’s (Wednesday, July 23) full council meeting, Liberal Democrat Mark Wilkes tabled a motion calling on the authority to pay the Living Wage as soon as possible and no later than April.
He said it would cost £371,000 a year but the council had £134m in reserves.
The council’s Labour leader Simon Henig said the authority was facing cuts of £30m for each of the next three years and in such circumstances its reserves were entirely prudent.
Labour’s Mike Dixon, who tabled the original Living Wage motion in December 2012, said a working group looking into the issue had discovered serious implementation problems.
Conservative leader Richard Bell said the issue should be thrashed out at a national level, prompting Cllr Wilkes to accuse him of “reverting to Tory type – to keep the poor poor”.
Cllr Wilkes also accused Labour of being champagne socialists and caviar communists, while Cllr Henig said the Lib Dems had cut taxes for the highest paid.
A Labour amendment to Cllr Wilkes’ motion was passed, committing the council to adopting the Living Wage only if it is found to be affordable and setting no deadline for doing so.
Cllr Wilkes said it was an absolute disgrace.
Source – Northern Echo, 23 July 2014
Living wage campaigners have hit out after it emerged a third of people in some North East towns are not earning to enough to get by.
Unions, politicians and even the new Bishop of Durham have called for more firms to take up the Living Wage, currently set at £8.80 in London and £7.65 across the rest of the UK.
Just 20 North East firms pay the higher than minimum wage to their lowest paid staff, a move the unions say has to change.
Latest figures show more than one in five people receiving less than the living wage, with some parts of the region faring much worse.
Darlington tops the region’s blackspots with 37.6% of people paid less than the living wage, with Blaydon at 34.2% and Berwick 31.7%.
Northern TUC boss Beth Farhat said the unions were looking to see more support for their pay battle: “Extending the living wage is a vital way of tackling the growing problem of in-work poverty across Britain.
“Working families are experiencing the biggest pressure on their living standards since Victorian times. Pay has been squeezed at all levels below the boardroom and it’s costing our economy dear.
“The number of living wage employers is growing rapidly and unions are playing their part in encouraging more employers to sign up and pay it – but Government must show equal initiative.
“We need to see a far greater commitment to pay the living wage from Government and employers, and modern wages councils which could set higher minimum rates in industries where employers can afford to pay their staff more. During Fair Pay Fortnight we’re asking workers to back our call to MPs to get all political parties to put decent pay at the top of their agendas in the run up to the election.”
The TUC campaign is today backed by Paul Butler, the Bishop of Durham, who said: “The Living Wage is good for everyone: good for the employee and their family – they have enough to live on; good for the employer in recruitment, retention and morale of their staff; good for us all.
“The Living Wage makes sense for everyone. It makes sense economically, socially, morally and spiritually. It helps us all build better lives and a better society.”
Union research suggested that for working women the picture is even bleaker.
The campaign has been backed by Hexham’s Conservative MP Guy Opperman, who has said he supports the need for firms to voluntarily take on the wage increase.
He said: “I have long been a supporter of the Living Wage. The campaign has really taken off in London and the South East, but what I hope to do today is to bring the campaign right here to the North East.
“I understand the concerns that business has, but I really want to explain the benefits it can bring. As many people will be aware, I am a huge advocate of the regional banking system we see in Germany. There are lots of things we can learn from our Germanic neighbours, especially around productivity.
> Is this guy (sic) really a Tory ? He won’t get far with opinions like those.
“Paying the Living Wage can have a hugely positive impact on things like productivity, quality of work, reduced absenteeism and retention of talented staff.
“In a recent independent study 84% of businesses believed paying the living wage led to increased productivity.”
Source – Newcastle Journal 01 April 2014