Contemporary UK wage floors and the calculation of a living wage

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.*Related content and download information correct at time of download. Purpose -The purpose of this paper is to describe how the voluntary living wage (LW) in the UK is set. It examines how this calculation relates to contemporary approaches to setting wage floors, both in relation to their goal of supporting adequate living standards and in relation to the place of wage floors in the labour mark. Design/methodology/approach -The paper examines how compulsory and voluntary wage floors are being determined, in the UK and in particular the role of public consensus in contributing to the calculation and adoption of a LW. It then reflects on the future sustainability of a system of wage floors in which the concept of the LW plays a significant role. Findings -The central finding is that widespread support for wages delivering socially acceptable minimum living standards has transformed the context in which low pay is being addressed in the UK. The LW idea has stimulated more decisive efforts to do so; however, if a compulsory version of a LW were to reach a level shown to be harming jobs, this could seriously undermine such efforts. Moreover, the extent to which adequate wages are compatible with high employment levels can also be influenced by state support for households, especially tax credits and Universal Credit. Originality/value -The paper clarifies how the setting of the UK LW contributes to objectives related both to living standards and to labour markets, and critically addresses some key issues raised.

“Money’s too tight (to mention)”: a review and psychological synthesis of living wage research

“…Prior debate about unconditional basic incomes regards this payment as separate to any employment contract. Future study should examine the impacts of life incomes through the natural experiments that have been created recently in different geographical areas, to allow direct examination of the consequences for local low-paid employees once they are liberated from the economic necessity of having to take low-paid work (Hiilamo, 2020). How far will these external interventions reduce local economic disparity and social tension?…”

The calculation of a living wage: the UK’s experience

“…The role of the state in the calculation is, after living costs, the other key determining factor of the Living Wage rates (Hirsch, 2017). Both the original methods opted to include income from government benefits.…”

La revendication du Living Wage : renouveau militant, négociation collective ou responsabilité sociale des entreprises ?

“…2. Pour des présentations d'ensemble : Grimshaw (2004) ; ; Hirsch (2017a) ; Lawton, Pennycook (2013) ; Prowse, Fells (2016a) ; Pyper, Mirza-Davies (2015).…”

“…Pour ces raisons et à titre expérimental, un taux annuel maximum de croissance a été introduit, égal au taux de croissance de l'indice des prix à la consommation majoré de 3 %. Les concepteurs du Living Wage insistent sur l'absence d'une solution optimale compte tenu des arbitrages inévitables entre des objectifs hétérogènes : refléter la diversité des structures familiales, délivrer un message simple, obtenir l'accord des différentes parties concernées, garantir la pertinence de la méthode et la fiabilité des sources statistiques… Un point important est qu'un accord général soit intervenu en 2016 après les divergences engendrées par les différentes stratégies d'acteurs adoptées au cours des 15 années précédentes (Hirsch, 2017a). Une autre conséquence des nécessaires conventions simplificatrices tient au fait qu'il est impossible de s'attaquer au problème de la pauvreté des ménages avec le seul outil du Living Wage.…”