Even though we are aware the recession is continuing to hurt family incomes, it’s still surprising to read about the terrifying rise in demand for food banks.
It’s almost unbelievable that families face ‘Dickensian levels of poverty’ in modern Scotland, but that’s how John Dickie, of the Child Poverty Action Group, described recent research by Save the Children and Citizens Advice Scotland which outlined the scale of the crisis.
It goes without saying this shouldn’t happen anywhere. However, what’s really concerning is how many of those turning to foodbanks come from working families. In fact, when you dig down into the figures, it becomes apparent having a job is no longer protection from poverty.
Six in ten children in poverty come from working households, whilst there are over half a million Scots in low paid work in Scotland. The idea it’s only those in unemployment facing poverty is a fallacy.
All of this makes the clear moral case for all workers to be paid enough to maintain a decent standard of living – which is what the Scottish Living Wage Campaign is all about.
Indeed the Scottish Youth Parliament recently launched their One Fair Wage campaign to convince employers to sign up to the Scottish Living Wage. For young people this is about fairness, and about fighting poverty.
However, whilst I completely agree with their angle, I think there is a wider point to be made for businesses as well. For many businesses payroll is often the largest cost in the organisation. And in tough times it’s easy for employers to try to reduce that expenditure.
The temptation to pay staff, especially low-skilled employees, the bare minimum is very alluring for employers. I’ve run my own business, so I know first-hand the pressures of balancing tight profit and loss accounts.
Unfortunately it’s a false economy. Low paid staff are considerably more likely to suffer from low morale, which, of course, translates to lower productivity and less effective teamwork. Also, if there is a mix of high and low paid staff that also creates resentment and divides in the workplace – which again hurts productivity.
Furthermore low paid staff don’t feel valued, and therefore are much less likely to owe loyalty to the organisation. This means they are likely to move if offered even a marginally better opportunity. That, of course, leads to high worker turnover which means the company incurs high recruitment costs, which is inevitable when new staff are being trained.
In contrast, paying the living wage has real benefits. An independent study of the business benefits of implementing a Living Wage policy in London, where a number of employers have committed to pay a Living Wage to all employees, found that more than 80% of employers believe that the Living Wage has enhanced the quality of work of their staff, while absenteeism has fallen by around 25%. Two thirds of employers reported a significant impact on recruitment and retention within their organisation and 70% felt that implementing a Living Wage policy had increased customer awareness of their commitment to be an ethical employer.
Sometimes in business you have to make a decision between doing something which is ethically the right thing, but will harm your businesses profits. This is not one of those situations.
Instead paying a Living Wage means employees are more productive, more loyal, and much more committed to making the company a success, and therefore making the company money. Of course, more employers paying a living wage also helps fight child poverty and gives people enough money to buy food. In every sense, it is the right thing for employers to do.
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