Summit Discusses Living Wage

Earlier today Scottish Labour Leader, Jim Murphy opened a Living Wage Summit in Glasgow.

The event, organised by the party, brought together representatives from trades unions, business leaders, the third sector and groups involved in action against poverty to discuss tackling low wages.

It follows the announcement at the beginning of this month of a series of policies to help young people in the workplace get a fairer deal.

A recent report from KPMG estimated that more than 400,000 people in Scotland earn less than the living wage, including more than 70,000 young people.

Scottish Labour has proposed the idea of Make Work Pay contracts to encourage employers to give these low paid workers the  living wage, currently set at £7.85 per hour.

Under the  proposals, employers would receive a tax rebate for every low paid worker who gets a pay rise to the living wage. The 12-month rebate would be equal to the increased tax receipts associated with pay rises which has been estimated at an average of £445 per worker.

In addition to increased tax receipts, it has been estimated the proposal would save an average of £232 per person in social security spending. That means a pay rise for Scotland’s low paid workers could save almost £100 million from the welfare bill.

The living wage provides a benchmark for tackling in-work poverty and has been shown to positively impact on the physical and mental wellbeing of workers.  Beyond the initial rebate, there are also real benefits to employers linked to reduced staff absence and turnover and increased productivity and morale.

We need to be proactive in encouraging businesses to get involved and Scottish Labour’s plan provides the incentive that could lift thousands of Scots out of low pay.

The issue of low pay is currently being taken forward by Scottish Labour’s Low Pay Commission.  The commission is made up of representatives from anti-poverty organisations and business, and will report later this year on how to end low pay in Scotland.

The Commission will be analysing the feedback from the summit and also examining trends in low pay.  They will consider Scottish Labour’s Future Fund, which will provide funding support to 18 and 19 year olds not in university, college or a modern apprenticeship, and also how Scottish Government procurement can be used to promote higher wages, and the living wage.

Today’s summit has demonstrated the broad support for the living wage across Scotland alongside Scottish Labour’s commitment to extend the rate to the private sector and to Make Work Pay.