George Osborne’s plans to introduce a national living wage have been lauded by the government as a way to give a boost to over 1 million low-paid workers. But will it really work?
Not everyone is convinced. The Resolution Foundation thinktank has said the benefits will not be felt by all, and others have complained that companies will reduce their hours in order to mitigate the cost of paying employees more.
We have spoken to some workers who fear the change could actually make their working life worse. Here, they tell their stories:
Anonymous, 28: ‘The living wage means I will no longer get overtime’
Life on the minimum wage is a constant struggle. I can’t afford new clothing or shoes (I depend on buying from charity shops, which are cheaper) and I don’t really have a social life outside of work because I can’t afford to go anywhere. Once I’ve paid my rent, travel expenses, debt and other bills I am not left with much. I live on baked beans on toast. Obviously I buy other cheap foods as well, but my diet is pretty monotonous. I am on anti-depressants due to the stress of making ends meet.
The living wage isn’t going to help. It just means I no longer get overtime, which I depend on to afford to live a normal life. As I work in retail, overtime isn’t always guaranteed, but because of the pay increases, there hasn’t really been any offered. At my place of work there are also lots of under 25s who won’t get the pay rise despite the fact that they work just as hard as everyone else, usually to the point of exhaustion.
Robin, 39: ‘To pay more we have to reduce staff hours’
I am the bursar at a charitable home providing nursing care for the elderly. Most of our staff are paid at or near the new national living wage and it is a constant struggle to manage on this money, especially for the young (older staff are more likely to own a property. This is virtually impossible for anyone under 35).
We are desperate to pay everyone who works for us the real living wage, but this year we are receiving only a 1.1% increase in the rates we receive from the local authority. We are increasing wages by 2%, which is difficult enough for us, but nothing like enough. We are caught between the squeeze on public funding and the need to pay a fair rate to our employees. We are desperately trying to maintain staff numbers and not to cut hours.
Other homes are reducing enhancements, such as weekend and bank holiday rates, because they can’t afford to pay them on top of higher wages. I hope the changes won’t affect working hours but if local authorities don’t pay more for care then we will have to reduce the number of hours our staff work.
There is unfortunately no way we can do this without the quality of the care we offer suffering.
Sandra, 45: ‘Now I will only earn 10p an hour more than my staff’
I was already on £7.18 an hour, and will get a rise of 12p an hour. The staff I supervise will get 50p an hour more, but because my employer can’t afford to give me the same rise, I’ll now be their supervisor earning just 10p an hour more than them, (or about £18 a month). It’s not much for the degree and postgraduate qualifications I have.
Dave, 40: ‘I want to pay staff more but as a farmer it’s impossible’
I want to try to explain the dilemma faced by medium-sized fruit and vegetable farmers who want to pay the (real) living wage. I already pay the new living wage but have been told by customers (who are in the food service or multiple retailers) that prices will not increase and if they do they will source from European competitors. An unmentioned result could be the further consolidation of rural land ownership into hands of large corporate farming enterprises in place of the remaining family farmers. Paying the living wage will reduce my income and job security.
Daisy, 52: ‘I will have to do the same work with less time’
My daughter’s partner earns the new minimum wage. He works for a pet supplier store in Peterborough. He has been working there for coming up to two years. He has worked lots of overtime and this has enabled him to pay his share of bills etc. The higher minimum wage means no overtime for any staff and the same work must still be done but with less time. The company has stated clearly that it cannot afford to increase wages, so hours will now be contracted hours only.
Kelly, 21: ‘The living wage means I will get paid less than older colleagues’
I can’t imagine another situation where it would be acceptable to discriminate against someone purely based on their age. What if the chancellor had instead decided that those over the age of 60 will not be entitled to the national living wage? Cries of ageism would have been heard. So why is it different for the under 25s?
From 1 April, those four years older than me will be receiving 30p a hour more for the same work. This is nothing less than demoralising, to be told your work and time is not as valuable as someone else’s purely because they were born before you. Being older does not necessarily mean that you have more experience. It could be their first week in the job, but my third year.