Implementing the living wage in UK local government

DOIhttps://doi.org/10.1108/ER-02-2017-0039
Publication Date02 Oct 2017
Pages840-849
AuthorMathew Johnson
subjectMatterHR & organizational behaviour,Industrial/labour relations,Employment law
Implementing the living wage
in UK local government
Mathew Johnson
Alliance Manchester Business School,
University of Manchester, Manchester, UK
Abstract
Purpose The purpose of this paper is to understand the impact of living wages on organisational
pay systems.
Design/methodology/approach The research draws on 23 semi-structured interviews with HR
managers, trade union representatives, and politicians at four UK local government case study sites.
Findings The findings suggest t hat living wages can ha ve a positive impact on d irectly employed
workers in cleaning, ca tering and care servic es, but the research also finds that the localis ed adoption
of living wages can lead to si gnificant wage compres sion, resulting in a broad ba nd of low skill-low
wage jobs.
Originality/value The theoretical contribution is twofold. In-line with earlier research the first-order
effects of living wages are clear: hourly wages for a large number of women in part-time roles increased
sharply. However, this is only part of the story as second-ordereffects such as ripples and spill-overs are
less extensive than suggested by other studies. This is due to the limited scope for trade unions to restore
wage differentials through collective bargaining, the slow progress in extending the living wage to contracted
staff, and parallel processes of downsizing and outsourcing.
Keywords Pay equity, Trade unions, Public sector organizations, Living wage, Low pay
Paper type Research paper
Introduction
High levels of income inequality and the increasing share of low wage work in many
developed economies have led to calls from trade unions, social justice campaigners,
and academics for a living wagefor all workers. In contrast with collectively agreed or
legally mandated minimum wages which are designed to protect workers against
exploitation and extreme low pay, a living wage is calculated explicitly to provide a worker
with sufficient income to reach a modest but decent standard of livingbased on the
cost of accommodation, goods and services within a particular country (Figart et al., 2002).
Living wage campaigns began in 1994 in the US city of Baltimore and have spread
to more than 150 cities throughout the USA since then (Luce, 2014), and the UK living
wage campaigns began in the early 2000s when The East Lo ndon Community
Organisation and one of the UKs largest trade unions, UNISON, began lobbying for a
living wage some 30 per cent higher than the UK national minimum wage (UK NMW)
(Wills, 2004).
The economic impact of living wage ordinances (laws) in the USA has been much
discussed (see Neumark et al., 2012), but the evidence on first-order effectssuggests that
they can increase wages at the bottom by up to 30 per cent (over the federal minimum wage)
with few of the adverse consequences predicted by critics in terms of the loss of jobs
and working hours, or stunted economic growth and business relocation (Luce, 2014).
Employee Relations
Vol. 39 No. 6, 2017
pp. 840-849
Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-02-2017-0039
Received 20 February 2017
Revised 3 July 2017
Accepted 14 July 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
© Mathew Johnson. Published by Emerald Publishing Limited. This article is published under the
Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and
create derivative works of this article ( for both commercial and non-commercial purposes), subject to
full attribution to the original publication and authors. The full terms of this licence may be seen at
http://creativecommons.org/licences/by/4.0/legalcode
840
ER
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