In this episode, we talk about the cost of living and about the moral and business case for employers to embed living wage initiatives in their HR strategies.
Bill Banham's guest today is Gail Irvine, Head of Business Development and Policy at the Living Wage Foundation
Gail joined the Living Wage Foundation in October 2022 and is responsible for driving forward new projects that maximize voluntary employer approaches to tackle in-work poverty and promote good work.
Previously, Gail was Living Wage Scotland Manager at the Poverty Alliance, the franchise partner delivering Living Wage accreditation in Scotland. Gail spent five years as a Senior Policy and Development Officer at Carnegie UK, a UK charitable foundation, where she led the delivery of their ‘Fulfilling Work’ program, focusing on policy and employer interventions required to make work better.
Questions for Gail include:
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In this episode, we talk about the cost of living and about the moral and business case for employers to embed living wage initiatives in their HR strategies.
Bill Banham's guest today is Gail Irvine, Head of Business Development and Policy at the Living Wage Foundation
Gail joined the Living Wage Foundation in October 2022 and is responsible for driving forward new projects that maximize voluntary employer approaches to tackle in-work poverty and promote good work.
Previously, Gail was Living Wage Scotland Manager at the Poverty Alliance, the franchise partner delivering Living Wage accreditation in Scotland. Gail spent five years as a Senior Policy and Development Officer at Carnegie UK, a UK charitable foundation, where she led the delivery of their ‘Fulfilling Work’ program, focusing on policy and employer interventions required to make work better.
Questions for Gail include:
Feature Your Brand on the HRchat Podcast
The HRchat show has had 100,000s of downloads and is frequently listed as one of the most popular global podcasts for HR pros, Talent execs and leaders. It is ranked in the top ten in the world based on traffic, social media followers, domain authority & freshness. The podcast is also ranked as the Best Canadian HR Podcast by FeedSpot and one of the top 10% most popular shows by Listen Score.
Want to share the story of how your business is helping to shape the world of work? We offer sponsored episodes, audio adverts, email campaigns, and a host of other options. Check out packages here.
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Speaker 2:HRGazettecom. Welcome to another episode of the HR Chat Show. Hello everybody, I'm your host today, bill Bannam, and in this episode we're going to talk about the cost of living and about the moral and business case for employers to embed living wage initiatives in their HR strategies. My awesome guest today is Gail Irvine, head of Business Development and Policy over at the Living Wage Foundation. If you haven't heard of them yet, check them out. Gail joined the Living Wage Foundation back in October 2022 and is responsible for driving forward new projects that maximize voluntary employer approaches to tackle in-work poverty and promote good work. Hey, gail, welcome to the show today.
Speaker 3:Hello, very nice to be here.
Speaker 2:So, beyond my little introduction there, why don't you take a minute or two, gail, and tell us a bit more about yourself?
Speaker 3:I've been at the Living Wage Foundation for a couple of years and before that I was leading the Living Wage campaign in Scotland, and it's just. I've always been really passionate about good work, good employment, how we can make sure that the world of work is changing in a way that benefits ordinary people, and I think the living wage has always been one of the most exciting campaigns in the world of work. So it's an absolute dream for me to work for the Living Wage Foundation and, yeah, Okay, thank you very much.
Speaker 2:Let's talk a bit more about the mission of the Living Wage Foundation in just a moment, but before we get there, gail, I think it's important to set a bit of context. We're mainly listeners. Today. We're mainly focusing on on the UK and the situation in the UK. This is a global podcast. We've got listeners all over the place, but it's mainly focused on the UK and the situation in the UK. This is a global podcast, we've got listeners all over the place, but it's mainly focused on the UK, although I think a lot of the lessons, a lot of the conversation, actually is applicable in other places too. Let's start, then, by talking about the increase in the cost of living, specifically in the UK over the past couple of years. There've been various factors contributing to that. Some of those are more political than others. I won't get into my thoughts around Brexit your listeners already know about that but what are some of those factors that have contributed to the cost of living and how bad has it got in the last couple of years, gail?
Speaker 3:It's got much worse than I think any of us could have imagined three years ago. So it has been the real striking difference has been it's basically double digit growth for the last two years, whereas we were used to seeing maybe one or two percent before that for a very long time. Pretty much the whole duration of the Living Wage Campaign, which has a wage rate that's based on changes in the cost of living, which has a wage rate that's based on changes in the cost of living. The main drivers, like you, say there's a lot to unpack there, but it's mostly been fuelled by rising food and energy prices, and a lot of that has been caused by some of these big macroeconomic factors.
Speaker 3:You mentioned Brexit, but there's, of course, the contraction of the whole global economy during the pandemic and then what reopening did to the economy. And the war in Ukraine obviously has been a massive factor as well, particularly driving up energy prices. And I think the most important thing to say is that everyone's been affected by increased cost of living, but it does fall on the lowest paid people in society the hardest, because they spend much more of their earnings on the essentials like food and energy, like paying their rent and affording their bills. So it's been really important at the Living Wage Campaign for us to ensure that the living wage rises in line with changes in the cost of living and actually to make the case that a wage rate that's based on changes in the cost of living is needed now more than ever during a cost of living crisis.
Speaker 2:Thanks for listening to this episode of the HR Chat Podcast. If you enjoy the content we produce, we'd be super grateful if you could subscribe and follow us on social media. And now back to the show. Okay, so my next question was going to be tell me about the mission of the Living Wage Foundation. You've touched upon it there, um. So, more than ever, then, you guys are. You guys are needed. Your mission is more critical than than ever. Right, what you're doing at the moment has got more impact than ever before. Is that fair to say?
Speaker 3:exactly? Um, is it worth me going back a bit and talking about where the campaign came from and how it's changed over recent years?
Speaker 2:Yeah, please do that, that'd be great.
Speaker 3:Because I guess what I would like to say is that, while that campaign is needed more than ever now in the cost of living crisis, the fact is that we just have never kept pace with the cost of living, or at least in recent decades in the UK. And that's where our whole campaign came from. And it started over 20 years ago with workers in the east end of london who were working, sometimes multiple jobs on the government's minimum wage and not being able to get by, not being able to afford the essentials, and that's why we alighted on this call for a real living wage, one that is calculated based on the actual changing cost of living. And so it started as a voluntary campaign. It was quite a local grassroots campaign in London calling on local employers to pay the real living wage, and that wage rate was then calculated by Loughborough University. It's now calculated with inputs from Loughborough University, but also the Resolution Foundation think tank, and it's overseen by a living wage commission.
Speaker 3:We update it every year but, as I alluded to, that used to be changes that were one or 2%, but the real change has been this massive leap into double digit inflation as the norm in the last couple of years. So, although it's never been easy to make ends meet on the minimum wage in the UK, it's become almost intolerable pressure on the lowest paid workers in the last couple of years, and so we do feel like it's needed more than ever. And what's been incredibly encouraging is that over the last couple of years I mean since the pandemic really we've seen a real increase in living wage employers. The network has more than doubled over that time and there's now 14,000 living wage accredited employers in the UK. So it's not just us that's saying this, it's over 14,000 employers who also recognise, now more than ever, a wage rate based on the cost of living is what really matters to low paid workers.
Speaker 2:Okay, thank you very much. So let's just be clear on a couple of definitions here, then. What is meant for? I think a lot of people are familiar with this term, but what is the definition of real living wage? And also, you guys have other initiatives, you have other terms living hours and living pensions. Perhaps you can talk a little bit about those two.
Speaker 3:Yeah, so just to clarify, like I say, the definitions are important. So when I say the real living wage, I mean the living wage that's set by the Living Wage Foundation, calculated by Resolution Foundation and overseen by the Living Wage Commission. It's currently £12 an hour across the UK and it's £13.15 in London where the costs of living have traditionally been higher, where the costs of living have traditionally been higher. So it's a voluntary rate and that's a really important distinction. Listeners will probably have heard. Obviously, the UK government has what it calls a national living wage, which is their minimum statutory wage floor for older workers, and so ours is voluntary. The government's, of course, is the legal floor, but also the critical difference is that the government's minimum wages is not based on the cost of living, whereas ours is and is recalculated annually to reflect changes. In that, our other initiatives it's great that you mentioned these We've also got something which is absolutely the other side of the coin to wages, which is living hours.
Speaker 3:Which is living hours, because ultimately, even if you are earning a real living wage, if you don't have enough hours in the week to make ends meet, you're not necessarily going to be able to escape poverty or to have a decent lifestyle for yourself. So living hours is our accreditation for employers, which is designed to tackle insecure work, particularly insufficient notice of shifts, shifts that are cancelled at the last minute and also just insufficient working hours. So that's a campaign which we've been running an accreditation since 2020. We launched and more recently we also introduced our living pensions accreditation, and that's because today's cost of living crisis is tomorrow's pensions crisis. Unfortunately, four out of five people aren't saving enough for retirement, and that rises up to 95% of low-paid workers. With 12% annual pension contribution, that will allow workers to save up a pension pot to have a decent standard of living in retirement and escape poverty in later life.
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Speaker 2:And now back to the conversation. I wonder if you're able to share the percentage, the proportion of folks in the UK who are living below that real living wage. I understand that the minimum wage will increase in April up to £11.44 per hour for workers who are over 21. But there's a difference between the £12, something you mentioned there for the real living wage compared to the minimum wage. How many folks are not even touching that level at the moment?
Speaker 3:So it varies across the UK, but the average is about 12% of the workforce are earning below the real living wage and the consequences of that are really severe. We did some polling last year that showed that 60% of workers earning below the real living wage had turned to a food bank in the last 12 months and about 40% were struggling to heat their homes or regularly skipping meals because of financial reasons. So, although the number of people earning below the real living wage has come down quite significantly over the last 10 years or so it used to be about 25% but the consequences of being below that threshold are incredibly severe threshold are incredibly severe. So that's why we continue to call for more and more employers to pay the living wage and particularly to become living wage accredited, because the conditions of becoming living wage accredited is that you don't just pay it to your directly employed staff, but you also start pushing it for your supply chain, so getting to some of those outsourced workers that are in some of the lowest paid and most insecure jobs in the economy.
Speaker 2:And what does it say about a company in terms of their CSR, their corporate social responsibility, if they are accredited, what does that say as a potential employer? Do you think?
Speaker 3:Well, it's one of the biggest drivers of becoming accredited is it improves your reputation as an employer. So 94% of living wage employers see business benefits from becoming accredited. But one of the things they cite most highly around 85% say that it's enhanced their reputation as an employer to have that badge of being living wage accredited and around 60% see improvements in their recruitment and retention as a result of being living wage accredited. So it very clearly helps with differentiating employers in a challenging labour market and being seen as an employer of choice.
Speaker 2:OK, this is me as devil's advocate now. Ok, so don't think that this is what I believe. But isn't there a case to be made that some businesses need the flexibility that they need to be able to offer below the real living wage amount, able to offer below the real living wage amount something closer to that minimum wage amount, just to be, just to be competitive, just just just to keep going in a very difficult market right now?
Speaker 3:it is a difficult market, but ultimately, the people that are bearing the worst costs of the cost of living crisis are people on the lowest incomes, and it doesn't really make sense to to us at the Living Wage Foundation that you would base your business strategy on poverty wages.
Speaker 3:We are a developed country, we're one of the biggest economies in the world and it does I mean.
Speaker 3:Something that a lot of the business leaders that are living wage accredited say to us is that they can't couldn't really look themselves in the mirror if they weren't trying to pay a base rate of pay that at least allows their staff to afford the minimum essentials, so things that I talked about, like being able to put food on the table and heat your home and, of course, there's a lot of different actors that have to play part in trying to bring down in work poverty, and I think we're definitely conscious of the huge pressures that have been placed on business in recent years through one crisis after another. But most employers can afford to pay a real living wage and will see business benefits from doing so, and it is worth saying that it isn't just a cost, it is an investment. As I highlighted, there are some noticeable business benefits that employers see very quickly once they make the change to paying the living wage to their staff. So it's not just a cost, it is an investment as well.
Speaker 2:OK, thank you very much. We are already coming towards the end of this particular conversation, gail. Just a couple more questions for you. The next one maybe kind of as a recap of some of the things that you mentioned before, but I'd like to give you an opportunity to sort of press it home. Uh, in terms of what have been some of those impacts of the living wage campaign so far, in terms of on workers, influencing government policy and so on, yeah, I mean the impact.
Speaker 3:The direct impact is really really exciting for us because we have over 14,000 living wage accredited employers and that means that there's about half a million workers in the UK who see their pay go up annually in line with changes in the living wage rate. That means there's actually across the UK now one in nine employees work for a living wage employer. So obviously there's scope to improve and we'd love to bring more employers into that number. But it is a huge campaign of businesses probably the biggest movement of businesses in the UK that are all behind this idea of a wage rate based on the cost of living. We also know that we have what we call the shadow effect of the living wage, so it's not just the employers the 14,000 that are accredited but there are many more employers that basically track the living wage and use that as their reference point for setting their base rates of pay, and so all the big supermarkets do that now, which is really encouraging to us given the huge numbers of workers that are on low pay within those industries.
Speaker 3:And we've also influenced government policy. I think we have seen we've been able to put a consistent upward pressure on the government's statutory minimum wage, and the most obvious manifestation of that, I suppose, was when the UK government rebranded its minimum wage rate for workers aged over 23 and called it the national living wage, so trying to borrow the language of our campaign. Sadly, they didn't change the methodology behind it in any way to actually take into account the cost of living, but I think we were very. We took it as a compliment, to be honest, that that was something they felt compelled to do and that they have actually continually pushed up their, their statutory minimum wage and what they call the national living wage over the years, so that that has reduced low pay in the economy as well okay, perfect.
Speaker 2:And just finally for today, gail, how can our listeners connect with you, so maybe that's linkedin. Maybe you might want to share your email address I bet you're super cool and all over tiktok and places and, of course, how can they learn more about the living wage foundation?
Speaker 3:uh, I'm definitely not cool or over tiktok, but I mean, the best place to learn about the living wage is just to go to our website, which is wwwlivingwageorguk. Um, I am on twitter but I don't use it very much anymore, but, um, I think it's gail underscore, irvin underscore. If you really want to find me, it's at gail underscore, irvin underscore perfect.
Speaker 2:Well, that just leaves me to say for today gail, thank you very much for sharing this very important message and being my guest today thank you and listeners as always.
Speaker 1:Until next time, happy working thanks for listening to the hr chat show and listeners as always. Until next time, happy working.