This Living Wage week, as people across the UK face soaring costs for food, energy and housing, it is more important than ever to talk about how companies can better support their workers. The real Living Wage is calculated by the Living Wage Foundation based on what workers actually need to ensure a decent standard of living – currently £10.90 per hour, and £11.95 for Londoners – higher than the government-set legal minimum National Living Wage.
Shockingly, 20 per cent of UK workers are still not earning a real Living Wage. Low-paid workers are hardest hit by rises in the cost of living, as a greater proportion of their income goes on essentials such as food, rent and energy bills. This is contributing to rocketing demand for food banks and worsening living conditions for families.
Working with investors to raise standards in the workplace
ShareAction has been championing the real Living Wage since 2013, working with shareholders of FTSE100 companies to encourage the firms to become accredited Living Wage employers.
We convene a Good Work coalition of investors that proactively engages with large companies to promote better standards including paying the real Living Wage, tackling insecure work and boosting diversity and inclusion. We publish in-depth research and briefings to help investors increase their understanding of workforce issues and become more powerful advocates for improvements. We create opportunities to leverage the collective influence of the coalition through joint statements, events and activity at companies’ Annual General Meetings (AGMs).
Back in 2003 Abdul Durrant, a cleaner at the headquarters of a major global bank, grabbed headlines by telling the board, executives and shareholders at its AGM about the financial hardship he and family faced due to his low pay. The bank responded with a pay rise for Abdul – and within the year it became a real Living Wage employer.
Pushing for low paid supermarket workers to get a pay rise
This year we’ve been focusing on UK supermarkets, who employ hundreds of thousands of staff, often on minimum pay despite their vital role as key workers. In March, we co-ordinated 10 institutional investors and over 100 individuals to co-file a resolution asking Sainsbury’s to accredit as the UK’s first Living Wage supermarket. The first of its kind UK resolution helped to win an increase in the pay of thousands of Sainsbury’s employees, although the company failed to include contractors such as cleaners and security guards, and stopped short of becoming a real Living Wage employer.
Our research on pervasive low pay challenged the whole supermarket sector to step up. Investors gave companies a clear warning: paying the real Living Wage is a minimum expectation for large companies and a key benchmark for judging their commitment to responsibility and sustainability.
Aldi, Lidl and Tesco have raised wages significantly this year. But more remains to be done. ShareAction is continuing to work to ensure that all supermarket workers are paid the real Living Wage. We expect to see more progress in the coming year.
Investors have a crucial role to play to ensure all workers are paid a fair wage
Investor engagement with companies has had a powerful impact in raising pay and standards. Half of FTSE100 companies now pay the Living Wage, up from two in 2003. There are now 11,000 Living Wage employers paying 390,000 workers the real Living Wage.
Investors who’d like to play their part can read the Living Wage Foundation’s toolkit of guidance on how to engage companies on issues of low pay, and join ShareAction’s Good Work investor coalition to multiply their impact.
While some argue that today’s economic conditions make it the wrong time to ask companies to increase pay, the reverse is true. More than ever, workers need and deserve a wage which reflects real living costs. While the real Living Wage alone cannot solve the cost-of-living crisis, providing a wage based on living costs is the best way employers can provide long-term security and stability for workers.
Investors have a critical role to play in driving change that ensures workers are rewarded fairly and treated with respect, and helps tackle poverty and inequality to build fairer societies.