Living Wage Week: good progress, but more to be done

The Scottish Living Wage is the real living wage – the UK government just hijacked the brand!

The new rate of £8.45 is a welcome increase for many thousands of low paid workers. Also congratulations to public sector ferry operators Calmac, for their Scottish Living Wage Champions award.

The start of Living Wage Week is an opportunity to remind everyone that the real living wage is based on actual costs of living. While any increase in the national minimum wage is welcome, it remains a flawed approach - not least because the 'living wage' element only applies to the over 25's. Shops don't differentiate pricing for those under that age.

I was chairing a session at today's Living Wage Expo that highlighted the difference between the two approaches with experts from the Resolution Foundation and the Centre for Research in Social Policy. The ‘real’ Living Wage movement requires strong advocates who can offer clear differentiation against rates that are not based on cost-of-living. 

While there is a welcome cross party consensus on the real living wage, there is a more positive approach in Scotland. 

As First Minister Nicola Sturgeon said:

“For business, paying the Living Wage makes sense - it’s an investment in people and all the evidence shows it leads to increased productivity and reduced staff absence and turnover, while sending a strong signal to customers about fairness. Yet we also know around 20 per cent of Scotland’s workforce earn less than the Living Wage. With low pay one of the main drivers of in-work poverty, it’s vital that employers who can pay the real Living Wage do so."

The Scottish Government has made an important commitment to pay the living wage for adult care workers, even if the implementation has been partial and muddled. They should make a similar commitment for childcare workers, 80% of whom are paid below that level. The proposed voucher scheme won't deliver a well-trained and fairly paid workforce. Both of these sectors rely heavily on government funding and therefore government has the levers to make real progress on the living wage.

As TUC General Secretary Frances O’Grady said today:

 “The fight for decent pay won’t be won just by employer goodwill, however. We need strong unions who can negotiate with employers and win fair pay for their members, along with a rise in the government’s minimum wage."

Wages are also not the whole story. Bad employers cut other terms and conditions, like holidays and sick pay, to meet the statutory minimum wage. That's why the broader fair work approach in Scotland is so important. Again, the Scottish Government has taken a positive approach through the Fair Work Convention and the Labour Market Strategy. The challenge is to use the levers of government to deliver on the worthy ambition in these approaches.

Living Wage Week is an opportunity to promote the Scottish Living Wage. Today's conference heard some inspiring stories from workers and employers on the benefits for individuals and businesses. Scotland has made good progress, but there is much more to be done.

Extending the Scottish Living Wage through procurement - vital in social care

A new UNISON Scotland Briefing has been published explaining how public bodies can use procurement to extend the Scottish Living Wage to all those working in public services.

Nearly all public sector workers in Scotland are now paid the Living Wage, (uprated this month to £8.25 per hour) but thousands who deliver public services in the community and private sectors don't yet receive it, particularly in social care.

New Statutory Guidance from the Scottish Government sets out how the Procurement Reform (Scotland) Act 2014 enables all public bodies to spread the benefits. Previous legal objections no longer apply.

Infrastructure Secretary Keith Brown said that employers "must now recognise that they cannot adopt exploitative practices in relation to their workers and expect... lucrative public contracts."

The Guidance on Addressing Fair Work Practices sets out how public bodies can legally include payment of the Living Wage in contracts, along with other employment matters, such as trade union recognition and representation and no "inappropriate" use of zero hours contracts.

(The Living Wage is a voluntary level for over 18s, higher than the current statutory National Minimum Wage (NMW) of £6.70 per hour for over 21s. It is an independent calculation of what is required to cover the basic cost of living.

While the increased legal minimum announced by Chancellor George Osborne as a new National Living Wage (NLW) of £7.20 per hour for over 25s in his July 2015 Budget is welcome, it is in effect a higher NMW, not a real living wage. It is nothing like enough to compensate for cuts to tax credits. IPPR Scotland said for low and middle income Scottish families the impact is "vastly outweighed" by the cuts.)

It is vital to progress the Living Wage in social care, which is facing a growing staffing crisis. The Scottish Government, COSLA and care providers are currently involved in discussions about how best to drive up pay in the care at home/housing support sector, recognising the links between pay, quality of care, retention and recruitment etc.

An interim funding deal is likely, with work continuing on a more robust proposal for 2016/17, alongside analysis of the full financial impact of the NLW 2016 to 2020 announcement and the overall cost of residential and non-residential social care.

UNISON wants to see the Living Wage included in all social care contracts and will also press our Ethical Care Charter. However, we accept that this has to be fully funded.  We welcome the Scottish Labour party's proposal to pay the Living Wage to all those working in social care.

UNISON branches should study the guidance in detail and ensure that public bodies: revise their procurement strategy to include the Scottish Living Wage; specify compliance with the S52 guidance in procurement documents and the consequences for the LW; revise their tender evaluation procedures to take account of the LW and other employment and 'fair work' standards. These can include no zero or nominal-hours contracts, trade union recognition and the Ethical Care Charter.

Under the Act, public bodies are required to set out their general policy on the Living Wage in their procurement strategy. Bids can be evaluated against that policy and payment of the Living Wage can become an enforceable performance clause. For contracts with a strong workforce element, such as social care, there can be a significant weighting in the evaluation for workforce matters.

With a civil society coalition behind '10 Asks' on the legislation, we had called for the Living Wage to be mandatory for all those working on public contracts. The guidance does not go that far but is an improvement.

UNISON still believes that EU law would allow it to be set as a contract condition. Advocate General Mengozzi's opinion, given on 9 September 2015 in RegioPost GmbH v Stadt Landau (C-115/14), was that EU law did not prevent contracting authorities setting conditions relating to the payment of minimum wages.

Further Statutory Guidance later in 2015 will cover areas including the Sustainable Procurement Duty, fair trade and tax dodging. There is separate guidance on blacklisting.

Creating better jobs starting with those who care for others

If we are to create better jobs in Scotland we need to recognise and take action on job security, worker control, appropriate demand, fair pay and opportunities for training and development.

I was giving evidence yesterday to the Scottish Parliament's Energy and Economy Committee's inquiry into work, wages and wellbeing. The evidence to the committee is well summarised in the Spice briefing.

While the impact of low wages and poor quality jobs on individuals and the economy are becoming better understood, it also has an impact on health. Professor Bambra's evidence to the committee argues that low quality work combines low levels of control with high psychological demand which can lead to increased levels of chronic stress, muscoskeletal conditions, heart disease, hypertension, obesity and mental illness.

There is also a strong economic case for better jobs. Well made by Professor Chris Warhurst at today's committee. The outcome of the current race to the bottom is the precariat. In some countries this can constitute as much of 25% of the workforce, whose contracts are either temporary or informal, or who arrive via employment agencies. In Scotland the numbers on zero hours contracts, particularly in the care sector, are understated because they largely ignore workers on nominal hour contracts.

This approach isn't even efficient. A study by economists at Delft University has concluded that a flexible workforce needs an expanded management bureaucracy to oversee it. Because precarity damages trust, loyalty and commitment, it demands more management and control. An entire generation of free-market workers has begun to act according to the factory adage of the old Soviet Union: “We pretend to work, they pretend to pay us.” The researchers conclude: “Easy hire and fire is at the cost of organisational learning, knowledge accumulation and knowledge sharing, thus damaging innovation and labour productivity growth.”

In its evidence to the Low Pay Commission, UNISON has highlighted that the conditions of the economy meet all the key criteria set out by the Low Pay Commission in its 2014 report as necessary for significantly faster increases in the minimum wage. These include; rising real wages in the economy generally, stable employment and an expectation of sustained economic growth.

Other factors supporting an increase in wages are the upward trend in the scale of low pay in the economy. This will be exacerbated by Government cuts to tax credits and other benefits, particularly for workers with families. The value of the National Minimum Wage has been eroded in comparison to the Living Wage and young workers have been penalised through the lower rates and their exclusion from the new so called National 'Living Wage'. At the other end of the scale there is the growth in the income of high earnings groups that has entrenched the UK’s position as one of the most unequal countries among comparable nations that are members of both the EU and OECD.

The committee asked us for specific evidence on the care sector that constitutes nearly 8% of the Scottish workforce and is a sector largely funded by the Scottish Government. The size of the Scottish care workforce has increased to 199,670, an increase of 5.3%. 77% of these work in home care and 85% are women.

There are some very poor employers in this sector and they have been encouraged by poor procurement practice. The Procurement Act and new statutory guidance should enable us to tackle this by evaluating future bids on their workforce policies including the payment of the living wage. However, the better employers rightly say that this must be funded properly. Given the leverage of government money there is an opportunity to develop the sort of sectoral bargaining that has been so successful in raising standards and productivity in other parts of Europe.

The care sector is a good example of where the race to the bottom in job quality and wages takes us. Staff who are desperate to exit the sector, creating high turnover, losing the continuity of care that is so important.

This inquiry is a welcome look at an important and complex issue and I look forward to their conclusions. However, there are practical actions the Scottish Government could take to develop the ideas in the Working Together report and Fair Work Convention. The care sector would be a good place to start.

 

Giving social care the priority it deserves

The social care crisis in Scotland is not given the priority it deserves, but there is a growing consensus about what needs to be done.

 

I was speaking at the Care Scotland, care at home conference on Friday. The panel was asked to set out what’s wrong with home care and how we would fix it.

 

On a national and local level we need to fix the crazy commissioning system that isn’t working for anyone. It isn’t working for providers who are struggling to maintain a viable business model. It isn’t working for staff; either social workers that are trying to put packages of care together, or home care staff that are the real victims of the race to the bottom in pay and conditions. Most importantly, it isn’t working for service users, who suffer from the high turnover of staff with little continuity of care, or are stuck in a hospital bed because there are no staff to care for them at home.

 

The solution primarily needs proper funding. It’s easy to blame politicians for obsessing about the NHS, but they are often just following public opinion that rarely understands that social and NHS care are interlinked. Personally, I am coming to the view that we need an agreed national rate for home care, as we have for residential care. This would be a rate that is dependent on providers paying the Scottish Living Wage and maintaining a range of other workforce standards. One of the merits of a national rate as against a local top up is that it wouldn’t just reward the bad employers in the sector.

 

That leads me to the second issue, employment standards. Any funding agreement has to include the key elements of UNISON’s Ethical Care Charter. The new procurement guidance rightly recognises that paying the Scottish Living Wage alone is not enough because some providers will simply cut other conditions. There needs to be action on zero and nominal hour contracts, sick pay and travel time. In addition, what comes through strongly in all our surveys is the importance of giving staff time to care and proper training linked to career progression. A recent UNISON survey highlights frighteningly low levels of training. Caring should be a great job and many staff I meet recognise that. But the household bills have to be paid and so many end up stacking shelves in supermarkets instead.

 

I am pleased to say that there was a broad consensus amongst the panel at yesterday’s conference on what needs to be done. Scottish Care also launched their latest research report on this issue, which is well worth a read.

 

The media headline was all about freezing heath spending, but the key finding is that investment in better social care for older people would improve their lives and help to cut emergency hospital admissions. In 2012-13, the average emergency hospital admission for over-65s lasted for 11.8 days, at an average cost of £4,846. That amount could fund either care at home for a week for 27.7 older people or 9.28 weeks in a residential care home for one pensioner.

 

Ranald Mair, chief executive of Scottish Care, said: "If we're going to manage to keep more people out of hospital, to maintain them in their own homes and also to prevent them going into long term care at an early stage, then we actually have to invest in home care. The danger at the moment is that we're continuing to invest in hospitals and as you know, all politicians want to be the defenders of the NHS. This isn't an attack on the NHS, let me be clear. If people need to go to hospital that's where they should be. But what we know is that over 20% of admissions of older people to hospital are 'unnecessary' admissions. They're not going in because of their clinical needs, they're going in because of their circumstances and because of the lack of alternatives."

 

It’s hard to disagree with that. Investment in social care and in particular the staff who deliver care, needs to be one of our highest priorities.

 

Work and Poverty

"Children are not private luxuries: they are a joy in themselves and a social good." CPAG

UNISON has launched a Childcare Charter calling for the provision of high quality childcare in this we also point out that Getting it Right For Every Child cannot be separated from improving how work fits into family life. As in work poverty continues to grow we need to look at the balance between hours worked, rates of pay and the need to undertake caring responsibilities in order
Almost two thirds of children living in poverty have at least one working parent we need to look at how make sure that work does indeed guarantee freedom from poverty. Child Poverty Action Group (CPAG)have published a new paper Round the Clock: in work poverty and the hours question. They pose the question “How many hours should parent work (in order not to be poor)? The research is not just about how much you can earn but how you balance working hours with looking after children. The research involves an evidence review on attitudes to parental employment, a poll asking how many hours it was reasonable for parents to work and when those hours should be, taking the polling results to focus groups and also asking more about working hours expectations for lower paid parents and finally taking the results to employers to hear their views. The report also considers the policy implications of the findings.

Choices about how and when to work are made in an economic and social context. Most people think that once you have children you will have to reduce spending in some areas because you have higher costs in others. An EHRC study on working preferences in 2009 found that 57% of high income households had a stay at home parent in contrast to only 25% of those on low incomes. As the recession has progresses average earnings have decreased and so those on low pay to work longer hours to make ends meet.

One and a half to two earner households have a very low risk of poverty, part-time work does not protect couple families or lone parents from poverty.

Children in lone parent families still have a substantial risk of poverty even if their parent works full time. Almost one third of children whose parents are self employed (a growing sector of the workforce) live in poverty

Changes to the benefits and tax system (including universal credit) incentivise those on low incomes to increase working hours while endorsing the traditional breadwinner role for the better off.

Poverty reduction strategies seem to be focused in encouraging all parents to work full time. The planned and recent expansion of childcare provision is increasingly linked to parental employment rather than child development. At the same time governments are also promoting programmes encouraging positive parenting and parents spending “quality time” with children. Running across the debate is an increasing confusion between the constraints that low incomes place on peoples’ parenting choices and actual neglect/harmful activities by parents.

Only 25% of parents were content with the balance between their home and working lives, 77% reported that work cut into the time they had available to helping children with homework, taking them to clubs and putting them to bed.
When asked how they would like to strike a better balance 27% would work less hours, more than a quarter saying they would take a pay cut to do so. 22% would give up work altogether, 22% would like to work from home some of the time and 21% would like flexible hours.

The survey went on to ask what working hours were thought to be reasonable for parents per week. Interestingly there was no clear gender social class or political persuasion link to responses. For many the one full time one part time working parent is now deemed the norm. participants thought it was reasonable for a lone parent to work more hours than “the carer” parent in a two parent household. Respondents also felt it was more reasonable for lone parents to work longer hours and by the time children were 3 very few felt it was reasonable for lone parents not be in work. They did though not expect both parents in a two parent family to be in full time work at this stage.

In focus groups it was clear that most think the balance of work/childcare is deeply personal, it was also felt that debates about working parents don’t focus enough on the needs of the child which it was widely believed should be put back in the picture. Parents frequently asked why parenting was not valued despite its “societal importance and manifold rewards” As UNISON’s charter states “While childcare should enable parents to work its focus must be on what’s best for children and their development”.

Key points from the CPAG report

Affordable quality childcare is essential, this means not just nurseries but also around school hours and summer break for older children.

Children also need relaxed quality time with parents: expanded childcare is not a substitute for this.

Vital role for tax credits in supporting those working less than full time but those in full-time work should have a living wage and not require benefits to live.

Flexible working can be a double edged sword: flexibility can be good but zero hours and short notice demands for extra or just insecure weekly hours difficult when childcare has to be booked and paid for regularly and in advance. It doesn’t mean the same thing for those at the top and bottom of the wage scale. Parents need predictable hours.

Wage progression is an essential part of a poverty reduction strategy so we need more childcare support for those undertaking training.

Working more hours helps people earn more money but cannot forget the importance of decent pay rates
Value of benefits must be restored to pre 2010 levels.

In work poverty is produced by three things: levels of pay, hours worked and level of in work benefits. Need to tackle all three and ensure that parents have the time levels of income to allow them to spend time with their own children.

UNISON’s Childcare Charter is available here

Inequality in Scotland: much needed detail and analysis

A new paper Inequality in Scotland: New Perspectives from David Bell, David Eiser and Michael McGoldrick, adds some much needed detail and policy analysis to an often simplistic debate around poverty and inequality in Scotland (and elsewhere). The paper contains a great deal of data from large scale surveys over the last thirty years attempting to identify the economic and social trends in Scotland.

There is also an analysis of the effect of policies on the distribution of income between rich and poor both those where that is the intended aim (tax and welfare) and others (housing or energy policy) which have other objectives.

Their analysis finds that the extent of distribution hasn’t changed much since the 1980s. The UK tax and benefits system still redistributes income at about the OECD average. As expected the minimum wage has been effective in raising wages at the bottom. This makes life better for lots of people. Sadly, if high earners continue to see massive increases in their wages and don’t pay a reasonable amount of tax on those earnings, income inequality will (and does) remain high. There is a detailed section on the Living Wage. Their research indicates that low pay is widespread across Scottish households with many combining a mix of high, medium and low earners. While the living wage will address individual wage inequality, household income inequality may not reduce. The picture is therefore complex. Within households the presence of a medium (or high earner) does not mean all those in the household have access to that income. Inequality exists within as well as between households. This analysis is therefore important but not really an argument against expanding the living wage to more workers.

There is a lot of debate about income tax and welfare spending in Scotland, much less discussed recently is the role of indirect taxes, which across the world are increasingly favoured by governments as an alternative to direct taxation. These increases inequalities as poorer households contribute more of their income on, for example VAT, than the rich. The same is true of energy policy as although better of people have higher bills the costs of energy takes up a much larger proportion of poorer households’ incomes.

What the report doesn’t look at all is the impact of public services on inequality and their role in reducing inequality through redistributing the cash value of services that would have to be paid for directly if not provided free at the point of use, like sending children to school, getting your refuse collected or visiting the doctor. This would have been a useful addition to the debate. The tax debate isn’t just about levels but about how we use the money that’s raised.

Let's be bolder on tackling poverty pay during Living Wage Week

During Living Wage Week we should focus on ensuring that the 400,000 workers in Scotland on poverty pay are paid the living wage.

The idea behind a living wage is very simple. A worker should be paid enough to live decently and to adequately provide for their family. It helps prevent in-work poverty and ensures workers are not exploited through low wages.

The Scottish Living Wage is good news for workers as they get higher wages that also improves their health and job motivation. It’s good for employers because it reduces turnover, improves productivity and attracts better staff through reputational gain. The wider community benefits through lower benefit cost, less stress on the NHS and cash into the local economy. The Institute of Fiscal studies has calculated sub-living wage employers cost the taxpayer £6bn a year in in-work benefits alone. The indirect cost on poverty is around £25bn a year.

This year’s Living Wage Week got off to a good start with a 20p increase in the rate to £7.85. That means a much needed pay rise for those on the living wage. That includes most of the public sector in Scotland and a growing number of private sector employers who have signed up voluntarily. The energy company SSE has been a champion of the living wage in Scotland this year and they have been joined by high profile firms including Nationwide and Heart of Midlothian Football Club. Celtic have yet to follow, but there is a great grass roots campaign pressing them at every opportunity.

Of course its women who are the main victims of poverty pay. Today is Equal Pay Day, marking the point at which women working full-time effectively stop earning as they are paid £5,200 (15.7%) less per year, on average, than men working full-time. Equal Pay Day for women working part-time was way back on 28 August. Research published last week by the World Economic Forum revealed that the UK has fallen out of the top 20 most gender-equal countries in the world for the first time after women’s incomes fell by £2,700 over the past year. The UK is now behind Nicaragua, Bulgaria and Burundi for women having an equal chance of a good education, career and health. And it’s not just women. Young workers, part-timers and black workers are all more likely to be on poverty pay.

The Scottish Government is to be commended for including the Scottish Living Wage in their pay policy and for supporting the Scottish Living Wage accreditation initiative. However, it is through procurement that they could do much more to extend the scope of the living wage in Scotland. Promises were made during the passage of the Procurement (S) Act that have not been delivered. Our experience on the ground shows that public bodies are not even abiding by the current rules - so we need to get a move on with developing the statutory guidance. In this briefing I set out how we could make progress now.

Labour also needs to be more radical. Ed Miliband’s plan to raise the National Minimum Wage (NMW) to £8 by 2020, won’t do a lot for workers below the living wage after you take into account rising inflation. UNISON and others, in submissions to the Smith Commission, have argued for the devolution of labour regulation including the NMW.

 

Scottish Labour, under a Leader like Neil Findlay, could be much bolder. Helping families out of poverty and saving the taxpayer from subsidising bad employers.

Britain needs good jobs and a pay rise

Britain needs a pay rise, not just to bring relief to hard-pressed workers, but also to drive a sustainable economic recovery.

That’s the message from the latest research and is particularly relevant to our members in Scottish local government, who are being balloted on industrial action over pay from next week. Their pay is the lowest, even across the hard pressed public sector, as they are asked to keep public services going against all the odds.

A TUC study on the living wage showed that women earn just 66p for every pound earned by men working full-time (which is a pay gap of 34.2%). One of the main reasons for this huge gender pay divide is the large concentration of women doing low-paid, part-time work. This has led to a majority of women working part-time earning less than the living wage in over 50 local authority areas across Britain.

It’s no better for young workers. The proportion of workers aged 21 to 30 who are now classed as low paid has more than tripled over the past four decades, according to new research from the ResolutionFoundation.  Almost three in ten (29%) are now low paid, equating to almost 1.5 million young workers. In 1975, the proportion earning low pay was less than one in ten (8%). This also explains why many young people are locked out of the housing market, with just 3% of buyers in June aged between 18 and 30.

Missing out on the claimed economic recovery is not limited to these groups. The Poverty and Social Exclusion in the United Kingdom project has revealed that 800,000 Scots were too poor to participate in basic social activities, more than 400,000 adults do without essential clothing and almost one-third cannot afford to heat their homes adequately in the winter. The majority of children in poverty come from small families with at least one parent in work – so much for the UK government’s ‘strivers and shirkers’ analysis.

Across the UK, the percentage of households below what the public considered a minimum standard of living has risen from 14% to 33% over the last 30 years. This is despite the size of the economy doubling, indicating the gap between rich and poor is increasing.

Low incomes are also linked to underemployment. The TUC’s analysis of the latest labour market data shows that while unemployment has fallen by over 400,000 since early 2012, under-employment has risen by 93,000. And at 3.4 million the current level of under-employment is over a million higher (46%) than it was before the recession. It also highlights that the numbers who want more hours in their existing jobs means that under-employment is still increasing. In UNISON, we see this in sectors like care, with nominal hours contracts becoming more prevalent.

The answer to what some economists call the productivity puzzle is that we have too many low-pay, low-skill and low-productivity jobs in low-investment workplaces. We need to rebalance the economy with an emphasis on creating good jobs and promoting fair levels of pay for everyone – not just those at the top.

Cleaners are Worth It

Cleaners are the neglected workers that most of us take for granted. They often begin their shift before or after most of us, but their job is vital to a healthy workplace and in some settings, critical to preventing the spread of infection.

UNISON Scotland has been surveying cleaning staff in areas where we organise to get a picture of how they are faring in the era of cuts and austerity. The report we published, 'Dishing the Dirt' paints a picture of a workforce largely, but far from exclusively, female, mostly part time, and trying simultaneously to deal with an increase workload and wages that don’t go as far as they used to.

A particular impact of the austerity cuts is that standards of cleanliness are declining. Across a range of environments there are complaints of either a lack of cleaning material or of switching to cheaper, less effective cleaning materials. As one NHS cleaner put it:

“Some of our cleaning products have stopped being supplied due to cut backs. We are told to use cold water or hot water with no product added. Hoovers fall apart and are held together with tape.” 

Another concern was work intensification. This usually takes the form of increasing the area to be cleaned without any expansion of working time. The result is that areas are not cleaned to either the standards that cleaners are happy with or that the public should be able to expect. As one school cleaner put it:

“Not enough time for size of area to clean. Was six hours per day between two people, now only me on three hours per day. Raised concerns to supervisor but told just to use initiative and clean what looks dirty. Not constructive answer and adds pressure to daily tasks. I never feel area is clean enough for purpose because of lack of hours”

Cleaners in the public sector have seen their wages cut in real terms by at least 10% due to government pay policy. Even with the welcome application of the Scottish Living Wage, many cleaners have real earnings less than they were a few years ago. The survey shows that cleaners are finding it harder to make ends meet and optimism about the future is in scarce supply. Years of declining living standards have impacted on morale. As a university cleaner put it:

“It has got worse in past three years. The wages don’t change but the cost
of living just seems to go up and up. How can people live healthily when the healthy foods cost so much and the prices keep going up.” 

A particular concern is that nearly one in five cleaners had been in a pensions scheme, but had opted because they couldn’t afford the contributions. This will lead to greater inequality in the long term and higher levels of pensioner poverty.

Employers are not even getting the soft skills right, with many cleaners reporting that they feel under valued. As a college cleaner put it:

“Not very often we get any positive feedback. Doesn’t seem to matter how hard you work, it’s never enough. Only really get comments if something’s wrong.” 

This survey should be a wake up call for employers who are ignoring their hidden workforce. Everyone should be concerned about the impact on hygiene and infection control. Cleaners matter – not just because they have as much right to dignity and respect in the workforce as any manager or Chief Executive. But because the work they do is vital in every respect. This should be recognised, by both ensuring that they are given the environment to do their job properly but also in recognising its value where it is most obvious – in their pay packets. Cleaners are Worth It.

Public service workers in the front line of the attack on wages

Tomorrow, UNISON’s local government members in England, Wales and Northern Ireland will be going on strike, joining with other public sector workers in their effort to secure a decent pay rise. In Scotland, local government workers have voted for industrial action by two to one in a consultative ballot and will be considering the next stage of their own pay campaign later this month.

Matt Sykes, at the Touchstone blog sets out why public service workers are taking action. He argues that it’s a wider manifestation of the anger and frustration felt by public sector workers over pay and living standards. Industrial action is the inevitable consequence when you have a government that makes announcements over pay, rather than engage in a meaningful dialogue. The declaration that pay restraint will continue until 2018 is another example of this.

UNISON’s Heather Wakefield sets out the local government case at the Public Finance blog with a damning set of statistics on pay and the long-term impact on pensions. Again, there have been no real talks and the employers have refused to join the trade unions in independent arbitration.

The TUC has published figures that show how the UK government has frozen or limited pay increases to well below the cost of living. This has left local government and other public service workers on average £2,245 worse off in real terms since this government came into office.

Concern about the standard of living stretches into retirement. Research published by Aviva indicates that a fifth of people in Britain believe they will have to “work until they drop” because they cannot afford to retire. Money worries mean millions of over-40s are expecting to carry on working until they cannot physically continue. Others are concerned about paying their day-to-day bills without the regular income from employment coming in.

An important element of current pay claims is the Living Wage. The final report of the independent Living Wage Commission, chaired by the Archbishop of York, Dr John Sentamu says that the number of people on low pay in the UK can be slashed by over 1 million by 2020. The Commission warns that, if the government does not support the voluntary extension of coverage of the Living Wage, some working families will continue to rely on emergency measures, such as food banks and unsustainable debt, to get by. Currently 5.2 million people earn less than the Living Wage in the UK and the majority of people in poverty are now in working households.

This message is reinforced in the largest study of poverty ever conducted in the UK. The Poverty and Social Exclusion in the UK (PSE) project details how, over the last 30 years, the percentage of households living below society’s minimum standard of living has increased from 14% to 33% – despite the fact that the economy has doubled in size over the same period. These findings seriously undercut the UK government’s claim to be lifting people out of poverty through work. Cuts to welfare benefits add to the low pay misery.

The Joseph Rowntree Foundation’s annual Minimum Income Standard report looks at how much people have to earn taking into account family circumstances, the cost of essentials and changes to benefits. This shows that a lone parent with one child now needs to earn more than £27,100, up from £12,000 in 2008. A couple with two children need to earn more than £20,200 each, compared to £13,900 each in 2008. Single working-age people must now earn more than £16,200, up from £13,500 in 2008.

Public service workers are at the front line of the attack on wages, while this government awards handouts to the super rich. Tomorrow is just the start of a fight back to keep workers out of poverty.

Progress on the Scottish Living Wage and procurement

Progress with spreading the benefits of the Scottish Living Wage depends on a robust approach to public sector procurement.

The Procurement Reform Bill reaches its final stage in the Scottish Parliament next week and one of the most contentious issues has been the exclusion of the Scottish Living Wage. Labour's James Kelly MSP, who also led a separate debate on this issue, makes the case well in his recent Scotland on Sunday article. He is supported by a large civil society coalition who campaigned on this and other procurement issues.

In fairness to the Scottish Government, no one doubts their commitment to the Scottish Living Wage. Scotland leads the way in the UK with the implementation of the living wage across almost all the public sector. They have also funded an accreditation project that aims to encourage more private sector employers to adopt the living wage. The gap is procurement and this is largely due to the muddle and confusion over EU law.

The muddle is largely of their own making because they sent a very unwise letter seeking clarification from the EU Commission in 2012 that formed the basis for the current guidance. Daft letters tend to elicit daft answers and that is what they got. We had a perfectly straightforward statement from the Commission in 2009 setting out the way the living wage could be applied in procurement. That approach is supported by the counsel opinion we provided to the Committee considering the Bill. Only last week the EU Commission repeated their position, when they corrected another unwise speech from the First Minister blaming the EU for the problem.

Despite all this, I am pleased to say that we are now making some very real progress. The Deputy First Minister has tabled amendments to the Bill that does introduce the living wage for the first time. This approach gives public bodies legal clarity and a way of introducing the living wage into procurement. They will now be able to include the living wage in their procurement strategies in a way that will make it clear to contractors that, for relevant procurements, they will evaluate bids taking their employment policies including the living wage into account. That will then be included in the contract and can be enforced through contract performance.

This will be set out in more detail in the statutory guidance that public bodies 'must' take into account in relevant procurements. We have been given a very clear assurance from the DFM that the guidance will be robust, actively enforced and we will be involved in its drafting.

This is important because past experience has not always been positive in this regard. In particular, we already have the Local Government in Scotland Act s52 guidance that was supposed to end the two tier workforce. However, that has been poorly followed by many authorities. The irony is that if authorities properly applied s52 then the living wage would already be mandatory in public procurement. That's because the guidance covers not only new outsourcing, but also to a change of provider. As councils pay the living wage that should be specified in the contract now to avoid a two tier workforce.

Of course we still believe that the Scottish Government could go further and make the Scottish Living Wage mandatory. The legal basis is clear and the grounds for legal challenge minimal, not to mention unlikely for the reasons I set out to the Committee. But governments are cautious beasts when it comes to legislation and the DFM has promised to pursue the issue further with the EU Commission. Verbally this time!

The absence of a mandatory provision means that public bodies might not make the necessary changes to their procurement policies. The main issue here is cost and the key area is social care contracts. This is being addressed in other forums and progress on this issue is the next big step forward. We believe the costs are not massive and in any case the current arrangements are indefensible, as UNISON Scotland's 'Time to Care' report shows.

So not everything we would want, but very real progress and potential light at the end of this very long tunnel. The Scottish Living Wage makes a big contribution towards tackling in-work poverty and promoting sustained economic growth. Using Scotland's substantial public procurement spend will be a big step forward.

 

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Fighting Low Pay

The new Joseph Rowntree Foundation report on “Rewarding Work for Low Paid Workers” reveals the complexity of low pay in the UK. The report looks at how effective human resources and development practices are for tackling in work poverty and whether a business case could be made to persuade low paying employer to increase wages.

The report contains detail on patterns of low pay in the UK which campaigners may find useful.

JRF make clear that voluntarism (waiting for companies to just raise pay themselves) "faces an uphill struggle if it’s to successfully reduce the relatively high incidence of low wage/low quality employment in the UK economy”. There is no substitute; it seems, for trade union action when it comes to improving workers lives.

There are now more people living in poverty in households with work than in households with no work.

5% of jobs (around 1.5 million) are minimum wage jobs (NMW) in the UK. And 20% of workers (5million) earn less than the Living Wage £7.65 per hour. This places the UK second only to the US in having high numbers of low paid workers.

The report also shows that the relationship between low pay and in work poverty is complex. Multi earner households even on low pay can avoid poverty just as a single earner can be living in poverty on a reasonable wage if they have non- working dependants. In fact 44% of adults in working poverty aren’t low paid.

Hospitality, retail and cleaning sectors are the worst offenders. They account for 54% of minimum wage jobs. Social care, transport, food processing and storage account for 4% each.

The incidence of low pay rises as the size of the organisation falls. Minimum wage jobs account one in 20 jobs in a large firms but one in 12 in small firms.

A 2011 survey (Workplace Employment Relations Survey WERS) showed that in one in six private sector workplaces one in four employees were paid an hourly rate below the adult NMW. The proportion in the public sector is one in forty. It’s no coincidence that trade unions have stronger representation in the latter.

The continued outsourcing of care and cleaning jobs from the public sector raises real concerns for the future wage rates of workers in these sectors.

What is clear is that low pay while not the sole determinant is a key factor in ensuring that many people live in poverty. And in work poverty costs the rest of us money.

If the Living Wage was paid across the UK we would save £3.6billion through a combination of increased tax revenues, higher National Insurance Contributions and reduced spending on tax credits. In short our taxes subsidise low paying companies’ profits.

UNISONs proposals to the Procurement Bill, currently being taken up by the Scottish Government, to guarantee the living wage and open up public contracts to smaller companies will help reduce the incidence of low pay. Joining a union and fighting for your rights will be even better

Fair Pay Fortnight

The Chancellor is in retro mode with our coins, sadly, he is in similar retro mode with wages and the economy. When what Scotland and the UK really needs is a pay rise.

When we last had a thrupenny piece, in the 1960s, up to 61 per cent of the economy went on wages. Since the 1980s, it has never gone above 56 per cent. These small percentages make a big difference to our living standards. George Osborne could equally go into retro mode with our stamps – perhaps reintroducing the Penny Red, or for Tories, probably Penny Lilacs. This would reflect that fact UK workers have experienced the longest real wage pay squeeze since 1870.

Measures in the budget were clearly targeted on the comfortably off, rather than those who have been hit the hardest by austerity economics. Changes in tax thresholds may take some out of tax, but they are actually pretty regressive. As this slide from the IFS post-budget presentation shows.

The much vaunted hard working families would gain more if this cash was used for increased tax credits.

Help for savers in the form of tax cuts and bigger ISA allowances are again targeted at the upper middle income groups. How many low paid workers can afford to save anything, let alone £15,000 a year. One in three Scots has saved nothing in the past three months.

There was nothing in the budget for hard pressed public sector workers who are promised more real pay cuts and further increases in pension contributions from 2015. Also, no recognition of the damage low wages generally is doing to the economy. Real wages have been cut for 44 months, a record unmatched since records began and a loss of £1600 per year for the average worker. This is why the recovery from recession has been so slow.

One measure that would boost pay for those who most need it is the Scottish Living Wage. Let’s be clear, Scotland’s public sector has been doing well at backing the living wage, far better than any other part of the UK, and politicians of all parties deserve credit for this. They have recognised that paying the Scottish Living Wage, currently £7.65 an hour, is good for staff, employers and the economy.

It is good for workers who benefit from higher pay, improved health and job motivation. At our Ethical Care Charter event in Renfrewshire last week a councillor told me how a constituent had come to his surgery and told him just how much paying the Scottish Living Wage had meant to her family. She said it literally meant she didn’t have to choose between shoes and food on the table.

The Scottish Living Wage is also good for employers, because it reduces turnover, improves productivity and attracts better staff through reputational gain. And the wider community gains through cash into the local economy, lower benefit costs and less stress on the NHS.

Many can see how a pay rise for Britain’s low paid could benefit us all. Small businesses will benefit from the 90 pence in every pound they spend in their local community. Why do we pay a cleaner less to pay her more in tax credits? A rise of £1.50 to the minimum wage would help the nation pay off its debt by cutting the welfare bill by £5 billion. Something the Chancellor might want to consider as the deficit is double what he said it would be in 2010 - with the consequence that austerity grinds on causing even more damage.

Despite these advantages one in five Scots still earn below living wage levels. And many public services are outsourced to the private and voluntary sectors, including in vital areas such as social care.  It is time to roll out the Scottish Living Wage to all those employed on public contracts. The Procurement (Scotland) Bill is a real opportunity for the Scottish Government to show leadership on this issue.

Lawyers will always find legal reasons to urge caution on ministers, but if Boris Johnson can do it, then surely the ‘progressive beacon’ that Scotland aspires to be, can do the same. If its money that worries ministers, then as we suggested last week, let’s use some of the budget’s Barnett consequentials. We could also clamp down on the tax dodging companies by banning them from public contracts.

We are regularly told that Scotland is one of the richest countries in the world - yet we run food banks and a fifth of the workforce don’t earn enough to live on. Everyone in Scotland and the UK deserves a pay rise and during Fair Pay Fortnight let’s shout that loud and clear.