Publication - Research and analysis

Wider Payment of the Living Wage in Scotland – Issues for Consideration

Published: 27 May 2015
Part of:
Research
ISBN:
9781785442629

Reviews existing international research on impacts and practicalities of introducing the Living Wage and of promoting it through public contracts; and explores the views, experiences and suggestions for action of Scottish employers who have already introduced the Living Wage, Scottish Government contractors and stakeholder organisations.

95 page PDF

1.4 MB

95 page PDF

1.4 MB

Contents
Wider Payment of the Living Wage in Scotland – Issues for Consideration
References

95 page PDF

1.4 MB

References

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Williams, D. and Sander, R. (1997). "An empirical analysis of the proposed Los Angeles Living Wage Ordinance". Final report prepared for the City of Los Angeles.

Details of studies included in the review of existing research

(a) Original evidence in the United States

(For context in this section: the federal Minimum Wage in the United States is $7.25 per hour in 2014.)

Baltimore City Living Wage Ordinance Compulsory, first adopted in 1994.

Living Wage in 2014 = $11.07/hour (valid until 30 June 2014) applies to public contracts of services.
State of Maryland and City of Baltimore minimum wage in 2014 = $7.25/hour applies to all businesses with at least two employees.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Niedt et al, 1999 Data: Minutes of the Baltimore Board of Estimates, Baltimore's Legislative Reference, Bureau of Purchases, Census, payroll data for school bus aides, and interviews.

Method: Calculations of labour costs for 26 contracts before and after implementing Living Wages, and interviews with 26 living-wage workers.
Interviews (26 cases) indicated no evidence that employment levels or working time had changed because of the Living Wage. The cost contracting increased around 1.2% after the introduction of the Living Wage. Costs varied according to sector: janitorial services rose by 16.6%; bus service contracts increased by 2.1%.

However, inflation was higher during that period. Hence, real costs of city contracting either decreased after the introduction of the Living Wage or did not have a significant effect on city budgets.
Interviews (26 cases) indicated more positive attitudes towards work.

Higher wages did not necessarily translate into higher incomes or overcoming poverty.
Not included in the study.
Thompson and Chapman, 2006 Review of studies. No negative effects on employment levels (cited by Preamble Center for Public Policy, 1998). Not included in the study. Not included in the study. Lower turnover.
Los Angeles Living Wage Ordinance Compulsory, first adopted in 1997.

Living Wage applies to city contractors with contracts over 3 months or $25,000. Also applies to employees of Los Angeles Airport.
Los Angeles Living Wage in 2014 = $10.91/hour with health benefits, or $12.16/hour if no health benefits are provided (valid until July 2014).
Los Angeles Airport employees in 2014 = $10.91/hour with health benefits, or $15.67/hour if no health benefits are provided (valid until July 2014).
Living Wage also provides 12 compensated days per year for sick leave, vacation, or personal necessity, plus 10 additional uncompensated days off for family or personal illness.
State of California minimum wage for all other employers in 2014 = $8.00.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Williams and Sander, 1997 Data: Survey applied to 310 contractors.

Method: calculations based on the data provided by the surveyed contractors.
Not included in the study. The total cost of implementing the Ordinance for service contractors represents about 4-7% of the total amount of all City service contracts. About 20% of workers who would start receiving higher wages would be lifted above the poverty line. Not included in the study.
Fairris, 2007 Data: Interviews with 82 Living Wage employers and surveys applied to 320 workers from 65 companies.

Method: calculations based on the data provided by the surveyed workers and companies.
81% of the companies did not reduce their workforce. It is estimated that job loss occurred for less than 1% of the covered workers, or 1.4% of those receiving mandatory wage increases. Not included in the study. Increased wages benefited low-income households but still 81% of respondents indicated that it was not enough to satisfy needs. The ordinance did not prompt firms to provide health benefits plans if they were not already providing them.
Reduction in training.

Lower turnover.
Fairris and Fernandez, 2008 Data: Survey of Los Angeles Living Wage Employers; used to match data of 82 Living Wage employers with data of 320 employees from 65 Living Wage firms, 2002-2003.

Method: regression analyses.
Substitution of labour towards male, Latino, and black workers with formal training. Not included in the study. Not included in the study. Lower in-job training.
Boston Jobs and Living Wage Ordinance Compulsory, first adopted in 1998.

Boston Living Wage Ordinance in 2014= $13.76/hour (valid until 30 June 2014), applies to city contractors and companies that receive governmental funds in the form of grants, loans, tax incentives, bond financing, subsidies, or other form of assistance of at least $100,000. Exceptions = construction (under different scheme), youth programmes, and traineeship programmes.

State of Massachusetts minimum wage in 2014 = $8.00/hour, applies to all other employers.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Brenner, 2005 Data: A survey applied to 72 city contractors.

Method: calculations based on the data provided by the surveyed companies.
No significant difference in changes in employment, from 1998 to 2001, between contractors who implemented higher wages and those that were already paying wages higher than the new rate. Only 15% of firms raised their bid prices. Not included in the study. Among the 13 companies that had increased wages as a consequence of the Living Wage, 25% reported higher employee morale and effort.
Brenner and Luce, 2005 Data: city accounts and a survey applied to 72 city contractors (see Brenner, 2005).

Method: calculations made with city accounts and with information provided by the surveyed companies.
Not included in the study. Total annual cost of the 28 city contracts was reduced in 17% after implementing the ordinance. For those who were earning below the Living Wage and had their wages raised to the Living Wage, severe poverty was reduced from 34% in 1998 to 13% in 2001; and poverty reduced from 41% to 28% in that same period. Among the 13 companies that had increased wages as a consequence of the Living Wage, 25% reported higher employee morale and effort (see Brenner, 2005).

39% of the 13 firms that introduced the Living Wage reported reducing profits to comply with Living Wage law.
Chicago Living Wage Ordinance Compulsory, first adopted in 1999.

Chicago Living Wage Ordinance in 2014 = $11.78/hour, applies to certain contractors and to companies that receive governmental funds. Contractors included: non-City employed security guards, parking attendants, day labourers, home and health care workers, cashiers, elevator operators, custodial workers, and clerical workers. Exceptions = not-for-profit organisations.
State of Illinois minimum wage in 2014 = $8.25/hour, applies to all other employers.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Tolley, Bernstein, and Lesage, 1999. Data: A survey applied to 133 firms in Chicago.

Method: calculations made with information provided by the surveyed companies and estimations to obtain citywide figures.
Estimated: a reduction in more than 1,300 jobs. Estimated: introducing the Ordinance would cost the city around 20 million USD, 20% of which would be paid by taxpayers in Chicago. Not included in the study. Not included in the study.
City and County of San Francisco Minimum Wage Ordinance Compulsory, first adopted in 2000.
Applies to All private and public employers, regardless of where they are located, who have employees working in San Francisco. This includes employees who are legally or illegally working in San Francisco. There are three rates: a general wage for all employees, a wage for for-profit contractors, and a wage for non-for-profit contractors:
City and County of San Francisco Living Wage for all employees in 2014= $10.74/hour.
City and County of San Francisco Contractors and workers of San Francisco Airport in 2014 = $12.66/hour.
City and County of San Francisco Contractors that are non-profit organisations in 2014= $11.03/hour.
State of California minimum wage in 2014= $8.00/hour, applies to all other employers.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Howes, 2002 Data: obtained from the San Francisco Case Management, Information and Payroll System and interviews with workers.

Method: calculations conducted by matching 18,000 San Francisco County homecare workers to 15,500 service recipients between November 1997 and February 2002.
Between 1997 and 2002: an increase of 54% in the number of homecare workers and an increase of 47% in consumers of homecare services. Not included in the study. 15% reduction in poverty rates. Turnover of workforce fell by around 17%.
Bhatia and Katz, 2001 Data: surveys applied to city contractors and administrative data provided by the city.

Method: estimations made with previously published estimates of the association between income and health status.
Not included in the study. Not included in the study. Reduction of days sick in bed, in depressive symptoms, and in subjective overall health. Not included in the study.
Elmore, 2003 Data: interviews with officials in twenty Living Wage cities or counties.

Method: calculations made with data provided by officials and with city accounts. Some estimates are provided for specific cities.
Not included in the study. In 2001: with a contract budget for human services of $312 million, the Living Wage resulted in a cost increase of 1.01% Not included in the study. Increased competitiveness and new services contracts put out for bid.
Reich, Hall, and Jacobs, 2005 Data: surveys applied to samples of airport firms before and after the implementation of the Living Wage, 1998-2001; administrative data of San Francisco Airport; interviews with eleven union organisers; and a survey applied to 99 workers. Method: calculations made with information obtained from the surveys and administrative data. No evidence of a reduction in employment. Not included in the study. Employees in SF Airport: Improved reported time spent with families, personal finances, hours worked, housing situation, and health status. Turnover was reduced between 5% (customer service) and 80% (security screeners) after the increase in wages San Francisco Airport.
Florida Minimum Wage Amendment Compulsory, first adopted in 2004.

It establishes a minimum wage that is higher than the federal minimum.
State of Florida minimum wage in 2014= $7.93/hour.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Pollin, Brenner, and Wicks-Lim, 2004 Data: obtained from the Employment and Wages reports, the 1997 Economic Census, Current Population Survey, and Annual Demographic Supplement for Florida.

Method: estimates using the data sources.
Not included in the study. Estimated costs for firms: an additional $443.1 million. It is estimated that the firms will bear 92% of the total costs, and the public sector will bear the remaining 8%.
After calculating increases in income taxes, reductions in benefits, and costs of implementation: $3.4 million in net fiscal savings.
Modest but significant effect on poverty alleviation. Retail stores would be expected to face an increase in sales of around 3% derived from the citizen´s higher purchasing power.

(b) Meta-studies and multi-city analysis in the United States

Author(s) and year of publication Cases Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Brenner, 2004 Los Angeles California, Miami-Dade Florida, San Jose California, San Francisco California, Detroit Michigan, New Orleans, Louisiana, Oakland California, Santa Monica California, New York City, Baltimore Maryland, New Haven Connecticut, Boston Massachusetts, Dane County Wisconsin, Corvallis Oregon, Hartford. Review of prospective and retrospective studies. See Table 1 below.
Thompson and Chapman, 2006 Los Angeles California, Cleveland, Ohio, Baltimore Maryland, Detroit Michigan, Boston Massachusetts, San Francisco California, Santa Monica California, New England, various studies with multiple cities, and studies on the national minimum wage. Review of existing literature. Little or no negative effect on employment. Small to moderate effects on municipal budgets. Not included in the study. Lower turnover and higher productivity.
Doucouliagos and Stanley, 2009 64 studies on the impacts of increasing wages in the United States. Meta-regression analysis of the estimated elasticity for employment. Once selection effects are controlled for, empirical evidence in the studies examined indicates no negative effect on employment. Not included in the study. Not included in the study. Not included in the study.
Schmitt, 2013 Original research, meta-studies, literature reviews, Review of existing literature. Little or no significant effects on employment. Not included in the study. Not included in the study. Not included in the study.
Neumark and Adams, 2003 70 cities. Data: Current Population Survey Outgoing Rotation Group 1996-2000.

Method: estimations using an equation to model wages across time according to demographic and city wages characteristics, and difference-in-differences to identify the effects of Living Wages.
No significant effects on employment after six months of implementing the Living Wage.

After 12 months of implementation: Positive employment effects in higher income households (elasticity of 0.07), but negative effect in lower income households (employment elasticity of -0.14); reflecting labour substitution toward higher skill workforce.
Not included in the study. Not included in the study. Not included in the study.
Elmore, 2003 20 cities. Data: interviews with officials in twenty Living Wage cities or counties.

Method: calculations made with data provided by officials and with city accounts.
Increases in service contract prices ranged between 0.003% and 0.079% of the localities´ budgets. See Table I, below. Not included in the study. Not included in the study. Not included in the study.
Pollin, Brenner, and Wicks-Lim, 2004 45 states. Not included in the study. Higher employment growth in states with higher wages than in states with federal wages, see Table 3, below. Not included in the study. Not included in the study. Not included in the study.
Giuliano, 2009 700 stores across the country. Not included in the study. Negative, but statistically insignificant effects on the full-time equivalent level of employment. Not included in the study. Not included in the study. Not included in the study.
Lester and Jacobs, 2010 15 cities that have passed Living Wage ordinances and 16 similar cities that have not passed Living Wage laws. Data: obtained from the National Establishment Time Series Database.

Method: Difference-in-difference.
No significant effect on citywide employment.

"It is important to note that the results are based on nearly 20 years of data-a timeframe that contained years of recessions and expansions-which suggests that business assistance Living Wage laws are unlikely to have an effect on employment levels even during hard economic times" (p. 24).
Not included in the study. Not included in the study. Not included in the study.
Dube, Lester, and Reich, 2010 504 counties. Data: longitudinal data for the accommodation and food services sector, extracted from the Current Population Survey 1990 - 2006.

Method:
Statistically negligible effect on employment. Not included in the study. Not included in the study. Not included in the study.
Allegretto, Dube, and Reich, 2011 Country-wide data for teenagers. Data: Current Population Survey, 1990-2009.

Method: regression analysis.
No negative effects on teen employment: Employment elasticity of -0.118, but statistically insignificant once state-specific trends are accounted for. Not included in the study. Not included in the study. Not included in the study.
Hirsch, Kaufman, and Zelenska, 2011 Georgia and Alabama Data: payroll and economic information of 81 fast-food restaurants in the two states 2007-2009; interviews with employers and employees; and Quarterly Census of Employment and Wages.

Method: regression analyses.
No negative effects on employment. Not included in the study. Not included in the study. Not included in the study.
Neumark, Thompson, and Koyle, 2012 26 cities: 14 that had implemented Living Wage laws before 2002 and 12 cities that did afterwards. Data: Current Population Survey between 1995 and 2009.


Method: regression analyses.
Not included in the study. Not included in the study. A reduction in the poverty rate by 2.4%. Not included in the study.
Allegretto, Dube, Reich, and Zipperer, 2013 Country-wide data for teenagers and restaurant workers. Data: American Community Survey Census, Current Population Survey, Quarterly Census of Employment and Wages, and Quarterly Workforce Indicators.

Method: various econometric models, controlling for time-varying heterogeneity and spatial discontinuities.
"Results from four databases and six approaches all suggest employment effects are small" (p. 1).
Employment elasticity: between -.076 and -.004 for teenagers and between -.030 and -.000 for restaurant workers.
Not included in the study. Not included in the study. Not included in the study.

Table 1 Economic Impact of Various Living Wage Ordinances - retrospective evidence - from Brenner (2004)

City
(Source)
Fiscal Year
Living Wage
Implemented
Wage Increase
as a Percentage of
the Minimum Wage
Average Annual
Increase in Real
Contract Costsa
Number of
Contracts
Reviewed
Baltimore, MD
(Weisbrot and Sforza-Roderick 1996)
FY 96-97 44% -1.9% 19
Baltimore, MD
(Niedt et al. 1999)
FY 96-97 44% 1.2% b 26
New Haven, CT
(Brenner and Luce 2003)
FY 97-98 56% -10.9% 9
Boston, MA
(Brenner and Luce 2003)
FY 99-00 57% -7.3% 29
Dane County, WI
(Elmore 2003)
FY 99-00 54% 2.8% b,c 12
Corvallis, OR
(Brewer 2001)
FY 00-01 38% 9.1% 31
San Francisco, CA
(Elmore 2003)
FY 00-01 57% (with health)
78% (without)
1.0% b,c -
Hartford
(Brenner and Luce 2003)
FY 00-01 43% (with health)
71% (without)
33.4% 2

a. Percentages are weighted by contract value.
b. Contract cost increases are measured in nominal terms.
c. These figures are for the human services contracts covered by the living wage law in each locality.

Table 2: Increases in City Contract Costs after Passage of Living Wage Laws - from Elmore (2003)

Locality City Budget Contract Cost
Increase
Increase as a %
of City Budget
Alexandria,VA $395,636,000 $265,000 0.067%
Berkeley, CA $289,546,000 $229,000 0.079%
Cambridge, MA $296,467,000 $150-$200,000 0.067%
Hartford, CT $422,667,000 $160,000 0.038%
Hayward, CA $135,400,000 $9,000 0.006%
Madison,WI $159,000,000 $29,000 0.018%
New Haven, CT $511,071,000 $20,000 0.003%
Pasadena, CA $493,596,000 $240,000 0.049%
San Jose, CA $645,000,000 $40,000 0.006%
Warren, MI $136,490,000 $60,000 0.040%
Ypsilanti, MI $13,000,000 $6,000 0.044%
Ypsilanti Twnship, MI $24,745,000 $0 0.0%

Table 3: Comparing Employment Growth for States with Above $5.15 Minimum Wage Standards versus States with only Federal $5.15 Minimum, from Pollin, Brenner, and Wicks-Lim (2004):

  6 states with above
$5.15 minimum wagea
39 states with only
Federal $5.15 minimum wage
Overall employment growth 0.55% 0.43%
Restaurant industry employment growth 1.40% 1.90%
Hotel industry employment growth 0.61% -0.24%

(c) Evidence on the London Living Wage[5]

London Living Wage Voluntary. London Living Wage in 2014 = £8.80/hour, applies to public, private, and non-governmental sectors that voluntarily pay the Living Wage.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Sokol et al, 2006 Interviews with and a survey applied to 65 workers in the hospital. Not included in the study. Not included in the study. More than 87% of workers (55 employees) stated that their lives have improved as a consequence of the new pay scheme. Also, the proportion of employees who reported to feel to have enough money to pay for their housing after receiving higher wages was almost 71%. Not included in the study.
Wills, Kakpo, and Begum, 2009 A survey was applied to 292 employees in Queen Mary University of London and 73 follow-up interviews were conducted during 2008. Not included in the study. Not included in the study. Employees reported to work more productively, with increased supervision, and with a broader range of tasks.

Also, workers felt higher satisfaction with their working conditions
Not included in the study.
Wills and Linneker, 2012 Comparative case studies of 16 companies, 7 of which had information for before and after the implementation of the London Living Wage. Not included in the study. The Exchequer would save around £823 million per year. Not included in the study. Labour turnover was reduced in 25% in average, which represented savings of 0.3% in relation to their costs before introducing the Living Wage
Pennycook, 2012 Examined financial data of 79 firms. Not included in the study. Not included in the study. Not included in the study. Average wage bills for companies would be larger in the food and drug retailers (4.7%), general retailers (4.9%), and bars and restaurants (6.2%). However, wage increases in the other industry sectors would be between 0.1% (banking) and 1.1% (food producers).
Flint, Cummins, and Wills, 2013 300 interviews, 173 who were receiving the London Living Wage and 127 who did not. Not included in the study. Not included in the study. Those who received the London Living Wage scored 3.9 units higher (in a 70-point scale) than those who did not. Not included in the study.

(d) General evidence in the United Kingdom

Living Wage Voluntary.
UK Living Wage in 2014 = £7.65/hour, applies to public, private, and non-governmental sectors that voluntarily pay the Living Wage.
Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Lawton and Pennycook, 2013 Estimates of the costs and benefits of introducing the Living Wage universally in the United Kingdom. Net savings for the state would be of around £2.2 billion Positive effects in alleviating poverty, especially for low-income households.
Kennedy, Moore, and Fiddes, 2013 Using a survey of household finances, with a sample of 1,500 workers in the UK, the study looks into differences in various financial indicators between those who receive a Living Wage and those who do not, taking into account information collected in October 2012 and in October 2013. Not included in the study. Not included in the study. Around 38% of those who were earning less than the Living Wage reported a deterioration of their financial stability, compared to 23% of those who were earning the Living Wage or above the Living Wage. Also, those who were earning the Living Wage were more confident about their financial future (28% expected an improvement and 36% expected a worse situation) than those who were earning less than the Living Wage (21% expected an improvement and 51% expected a worse financial situation). Not included in the study.
Metcalf, 2008 Review of studies on the effects on the British National Minimum Wage on Employment No association between aggregate UK employment trends and the introduction of NMW. Not included in the study. Increase in real and relative pay of low paid workers. Not included in the study.
Reed, 2013 Estimates of applying the Living Wage to the entirety of the United Kingdom. Using the UK´s Office of Budget Responsibility multiplier: net employment loss of 95,000 jobs.
Using the International Monetary Fund´s lower and higher bounds of the multiplier: net loss of 45,000 jobs and net increase in 58,000 jobs.
An increase of around £1.5 billion in the public finances. Not included in the study. Not included in the study.

(e) Evidence in specific UK jurisdictions

Living Wage Voluntary.
UK Living Wage in 2014 = £7.65/hour, applies to public, private, and non-governmental sectors that voluntarily pay the Living Wage.
Jurisdiction Author(s) and year of publication Methodology of the study Effects on employment and labour demand Effects on public budgets Effects on recipients Other effects
Brighton & Hove Brighton & Hove Living Wage Commission, 2012 Review of evidence and development of debates and interviews between October 2011 and March 2012. No precise calculations, but high hotels and catering sector mean that more private jobs than average (29%) paid below Living Wage in Brighton and Hove Relatively few public sector jobs (5%) were below the Living Wage in Brighton and Hove. The Living Wage would "help lift some of the 22% of children in Brighton & Hove out of poverty and out of the 'benefits trap´" (p. 8).

Promotion of equality between those who earn less and those who earn more.
Higher staff retention, loyalty and motivation.

Economic spill-over in the city, due to higher earnings and higher spending.
Cardiff Corporate Chief Officer, 2012 Estimates based on governmental data. Not mentioned. "The impact on pay differentials will need to be closely monitored to see if there are any recruitment and retention issues that need to be addressed" (p. 3).

The estimated costs of implementing the Living Wage in Cardiff Council were of £1 million in a full year and around £584,000 in 2012/13.
"Notwithstanding the future national agenda concerning welfare reform, the current benefits landscape is complex and is linked directly to individuals' personal circumstances so it is difficult to develop an approach that caters for every eventuality" (p. 4). Not mentioned.
Manchester Holden and Raikes, 2012 Review of evidence and calculations based on various sources of national and local data, as well as referring to the Minimum Income Standard method. Makes reference to evidence on the national minimum wage in the UK: effects on employment have been marginal.

References to evidence in the United States: no negative effects on employment or some labour-labour substitution.

"The current evidence on the impact of Living Wages (on employment or labour demand) is not sufficiently developed in the UK to assess the extent to which these theoretical impacts arise in practice" (p. 41).
Negligible negative economic impact.

"Both local and national Government would benefit from more employers paying a Living Wage, as the amount they have to pay towards in-work benefits (for example tax credits, housing benefit and so on) reduces and they are able to make savings from services that deal with the consequences of individuals getting into financial difficulties" (p. 42)
Higher income, more stable family life, improved health and well-being.

Additional support should be given to those in debt.
Higher retention; lower recruitment costs; higher quality staff; better attendance; higher productivity, motivation and loyalty; and better quality of service.
Newcastle Independent Advisory Panel to Newcastle City Council for the Living Wage, 2012 Review of evidence and interviews. Not mentioned. "We do not think it is a matter for the Panel to determine whether Newcastle City Council or any other employer can afford at any particular time to pay a Living Wage. We think that is a matter for each employer to consider carefully, both from a strategic perspective and from a consideration of the current demanding economic situation" (p. 14). Significant increase in income for some low-paid workers. The exact effects on household income would depend on the, then proposed but not yet implemented, welfare reform. Greater productivity, better quality of work, reduced absenteeism, reduced turnover, and higher levels of recruitment and retention.

Economic spill-over in the areas around Newcastle, due to higher earnings and higher spending.
Newcastle Catherine McKinnell MP, 2013 Responses to debate on taxation and the Living Wage, held in January 2013. Not mentioned. "the analysis by the Institute for Public Policy Research and the Resolution Foundation suggested that introducing a Living Wage could lead to a net gain to the Treasury of more than £2 billion a year when the costs of paying it throughout the public sector are set against reduced benefit and tax credit payments, and higher income tax and national insurance receipts".

Newcastle "is meeting the cost of paying the Living Wage entirely from a reduction in management costs".
"We want to aim for a higher skilled, higher waged and more productive economy that can genuinely compete on the global stage so that workers are not forced into several jobs with no chance of spending proper time with their families". "Around 140 private sector employers have taken that step; (...). Many of those firms have been clear about the positive impact that paying a Living Wage has had on their companies. KPMG has reported higher employee morale, motivation and productivity alongside a reduction in staff turnover and absenteeism since the policy was implemented".
Wales Marsh et al, 2010 Using data from the Quarterly Labour Force Survey 2008, the authors simulate the effect of different Living Wage levels on poverty rates. Taking into account an elasticity of labour demand of -0.12 (based on Adams and Neumark, 2005), results suggest that if 10% of the 93,600 public employees in Wales were to receive the Living Wage, there would be an employment loss of between 2.4% and 3.6%, or 230 to 340 jobs. Not included in the study. The Living Wage would help households to move above the poverty line. Not included in the study.

Contact

Email: Alison Stout