Can Falkirk Bairns escape the poverty trap?

Around five million people are in working poverty in the UK
Around five million people are in working poverty in the UK

Imagine going out to work every day but still wondering if you are going to have enough money to feed your family at the end of the week. Unfortunately for thousands of workers around the country that scenario is one they constantly face.

They are in work but they earn so little that they are still struggling to make ends meet.

A determination to support their families has led them to accept low paid employment.

Sadly, and perhaps surprisingly, some of the biggest names in the country are the worst offenders. They pay the National Minimum Wage – £6.50 an hour for over 21s – but this is still well below what has been calculated as an income needed to provide an adequate standard of living.

However, from Monday other companies and organisations, which have signed up to pay the Living Wage, are now giving their employees an additional 20p an hour, taking the rate to £7.85.

It is paid voluntarily, by those who are accredited by the independent body the Living Wage Foundation. The Living Wage enjoys cross-party support and public backing from Prime Minister David Cameron and Leader of the Opposition Ed Miliband.

It is paid to 35,000 workers across the country.

The number of companies paying the Living Wage has more than doubled in the last year and now there are more than 1000 companies who can boast they are accredited employers, including 18 FTSE100 firms.

Locally, both Falkirk Council and Falkirk Community Trust are Living Wage employers. In Scotland, Standard Life, RBS and the SECC have all become accredited employers in the last year.

But across the UK 22 per cent of workers – 5.2 million – still don’t earn the Living Wage.

It is calculated every November after a study into what households need in order to have a minimum acceptable standard of living and includes things such as food, clothing, rent, council tax, fuel for heating homes and, if applicable, childcare.

Councillor Craig Martin, leader of Falkirk Council, said the local authority – the largest employer in the district – took the decision to commit to paying the Living Wage in 2012.

He said: “We saw it as a way of bringing people in Falkirk who are in employment out of working poverty. It gives people a chance to earn a fair income and we are committed to ensuring that is the case for everyone employed by this council.”

Announcing the new rate, John Swinney, Scottish Cabinet Secretary for Finance, Employment and Sustainable Growth, said: “Tackling low pay is a key priority of the Scottish Government and we fully support the Living Wage campaign. We recognise the real difference it makes to the people of Scotland which is why we are the first Scottish Government ever to pay the Living Wage to all employees covered by pay policy.

“We are firmly of the view that employers should reward their staff fairly and encourage businesses throughout the country to support the Living Wage campaign. That is why we are funding a pilot by the Poverty Alliance for the next year, to promote take up of the accreditation scheme and increase the number of employers paying it in all sectors in Scotland.”

Gains all round from better pay

Nearly one in five Scottish workers earn less than the living wage.

It was announced this week that it would rise to £7.85 an hour.

Where the Living Wage differs from the National Minimum Wage, which is currently set at £6.50 an hour for over 21s, is that employers choose to pay it. They are legally obliged to pay the National Minimum Wage.

It was introduced to tackle low pay.

The Scottish Living Wage campaign argues that it allows employees to afford a decent quality of life, for some allowing them to work fewer hours and give them time to see their families, volunteer in communities or look after their health.

Those working in Living Wage workplaces feel better about themselves and also report that their work, family life and finances are all improved, according to the campaign.

It also argues that there is a benefit for employers with those paying the Living Wage reporting up to a 25 per cent fall in absenteeism, having better motivated staff, finding it easier to recruit and retain staff and gain public approval by awareness of their being Living Wage payers.

The Scottish campaign states that the Living Wage is only part of a package of measures needed to tackle poverty, the causes of which are complex. But they say that, by paying the Living Wage, employers can help the wider community and the local economy.

Paying workers a Living Wage gives people additional money in their pockets which that tend to spend locally on goods and services. It also reduced the need for in-work benefits such as housing benefit and working tax credits.

These have been criticised as unfair subsidies allowing some companies to cut their wage bills at the expense of the taxpayer which gives them an advantage over competitors who pay their workers properly.