Living wage ‘a win-win-win’ for Britain, says economist

A living wage expert in New Zealand for a series of meetings says the policy has been a “win-win-win” for Britain.

Alan Freeman established the first Living Wage Unit in Britain in 2001 when he was principal economist for the Greater London Authority.

“London is a deeply divided city, you have extremes of wealth and poverty,” he said.

“A living wage campaign began precisely because a majority in London are actually on wages significantly lower than the minimum.”

The economist and author worked with officials to determine how to roll out the policy, liaising with citizens, business groups, unions and faith groups to assess its impact.

“By all accounts, it was hugely successful,” he said.

“That is why it was adopted as national policy after it was adopted in London . . . with the support of all political parties.”

The compulsory national living wage was introduced in Britain last year.

Freeman, who now lives in Winnipeg, Canada, is a guest of Living Wage Aotearoa.

He will meet Auckland Council and Wellington, Hutt and Porirua City councils, the Wellington Regional Council and will front an Auckland Conversations public meeting at the Aotea Centre tomorrow.

Freeman said his meetings would discuss how organisations and businesses could start phasing in a living wage.

Auckland Council voted last month to introduce a living-wage policy, which will be phased in with all staff to be paid at least $18 per hour from September, increasing each year until 2019.

“I know in Auckland, initially it’s simply a payment policy,” Freeman said. “In London, here’s the way it rolled out. First we did it as ‘ this is what we pay the people who walk through the gates of City Hall’.

“Then we started talking to our contractors, and the fascinating thing is most low wage employers were the most interested in the living wage.”

Freeman cited the cleaners’ union there as an example. The union told him it wanted to pay its employees higher wages, but could not because the councils and the big employers would not pay more for their contracts to allow them to do so.

“So the blame has to go on the people who have the money, not the people who don’t have the money,” Freeman said.

In the UK, about 3000 employers have also signed up to a voluntary “Real Living Wage” scheme.

Under it, the minimum pay rate is calculated according to the cost of living in the UK based on the changing cost of a basket of groceries.

It is calculated every November, and accredited employers are committed to any increases.

In New Zealand, around 80 businesses are now accredited as Living Wage Employers.

“Everybody wins — they win because they can raise their families and [earn] respect, the employer benefits because there is much better performance . . . the public benefits because a whole series of costs which arise from poverty are eliminated, such as crime, health.”— Lincoln Tan