Following our exposé of school staff being paid below London Living Wage in Tower Hamlets, the Eastlondonlines team decided to investigate the topic further.
Across the four tabs below we have presented our findings from an afternoon of research into London Living Wage. You can look at our map which shows the location of all companies across the four boroughs that are accredited by the London Living Wage Foundation; look through the statements we’ve received from various companies, councils and unions; read the opinions of local resident; and find out how the London Living Wage is calculated.
The campaign to establish a living wage, as distinct from the legally obligatory minimum wage, was first launched by London Citizens, an East End charity, in 2001.
The organisation argued that the minimum wage did not meet the needs of families who earned at the lowest level.
Campaign activities included rallies, demonstrations and at one point, the occupation of HSBC’s Oxford Street branch in a protest over cleaners’ working conditions at the bank’s Canary Wharf site.
In 2005, the GLA established the Living Wage Unit to calculate the London Living Wage. Three years later, the Centre for Research in Social Policy at Loughborough University began determining a figure for the wider UK.
Those figures currently stand at £8.55 and £7.45, respectively, and are revisited annually. The minimum wage in the UK is £6.19.
The Living Wage Foundation provides accreditation to employers who pay the rate. The organisation states that the living wage campaign has collectively increased the income of over 450,000 workers by more than £210 million in its 11 years.
As of November 5, 2012, LWF recognises 96 companies and local authorities in the UK. 16 of these operate in the Eastlondonlines boroughs. They include Amnesty International, cosmetics company Lush and Shoreditch bar The Joiners Arms.
Of the four Eastlondonlines local authorities, only Lewisham Council is formally accredited.
View ELL London Living Wage in a larger map
Amnesty International UK
The Joiners Arms
Barts and the London NHS Trust
Bethnal Green Technology College
Bromley by Bow Centre
Queen Mary, University of London
In response to Eastlondonlines’ investigation into Tower Hamlets council’s payment of the living wage, a council spokesperson said:
“The council has been supporting the London Living Wage campaign since 2008 and Tower Hamlets is recognised as one of the top five local authorities in adopting the London Living Wage. The London Living Wage applies to all staff working directly on a contract, and also to staff employed by sub-contractors to a main contractor.”
Following this we got in touch with the Living Wage foundation to see how they view Tower Hamlets council’s position on London Living wage.
Sarah Vero, Accreditation & Communications officer at the Living Wage Foundation, said:
“Tower Hamlets council are classed an ‘in process’ employer. Because of the nature of having many employees, they will have to go through hundreds of contracts and bring them all up to scratch. It's not something that will happen overnight.
“There's no finalised timescale. It's been bubbling away for a while now and we hope that the LLW week will jump start councils and employers who have signed up. We're pushing for the changes to come in over the next 6 months to 2 years.”
In order to get a greater insight into lower wages, ELL tried to get in contact with some of the big supermarket chains which are big employers across the boroughs, we were mostly stonewalled but Sainsburys did get back to us with this:
"As a responsible employer we know that rewarding people properly is an essential part of being a great place to work. Our basic pay rate is well above the National Minimum Wage and when you add other benefits, such as bonus, our rate is equivalent to the Living Wage outside London.
"We have a location allowance to reflect higher living costs, in places such as London.
"Offering a comprehensive reward package is highly valued by our colleagues. It goes way beyond simply paying an hourly rate which is the focus of the Living Wage campaign. We are proud of the fact that our turnover rate is at a record low and that 13,000 people have worked for us for over 20 years. We are aiming for this to reach 20,000 by the end of the decade."
McDonalds said they would get back to us with a statement but we have not heard anything back yet.
With over 500 employers, Ikea is one of the biggest companies in Croydon, we got in touch with them to see what their policy is. The flat rate they pay staff is £8.13 per hour and they passed on a statement from Alix Main, benefits manager for Ikea UK and Ireland who said:
"Our ambition is that in the near future we will support the living wage scheme, however currently we are still exploring the possibility."
Croydon council, does not pay its staff the London Living Wage either, although it does pay everyone over the last Living Wage threshold and is considering making the increase to £8.55.
A council spokesperson said:
“Croydon Council has 3,200 members of staff who are all paid above the previous London Living Wage minimum hourly rate of £8.30. We are currently considering our position regarding the increase in the London Living Wage recently announced by the Mayor of London.”
Lewisham Council on the other hand says it does pay London Living Wage to all direct employees and as far as possible to contractor employees:
“The Council has decided that it will in all circumstances pay its employees at least the London Living Wage and wherever it is lawful to do so, requires payment of the London Living Wage by its contractors."
Chris Maines, Liberal Democrats Councillor for Black Heath, Lewisham had this to say on the matter:
"I'm very supportive of the London Living Wage, I think its a good thing. And I'm pleased to say that Lewisham council and all its contractors pay it.
"Smalls businesses, i'm afraid, just have to accept that living in London costs more. The costs are higher, rent is higher and so people need to be paid more here. Businesses can charge more for what they provide as a result."
Also in Lewisham, we got in contact with Chris Wheal, the borough's Branch Secretary for the National Union of Journalists (NUJ) who told ELL that the branch was “at the forefront of pushing national living wages in the industry”.
He also said that the NUJ were focusing on ensuring that work experience candidates are also paid London living wage.
Another union representative we were able to speak to was Matthew Waterfall, Hackney Branch Secretary of Unison. Who said that all public sector workers in Hackney are paid very well. He told ELL that because Hackney Council is “overwhelmingly in-sourced”, they are able to pay their staff over the living wage for London:
“All of our members are earning in excess of living wage. The workforce and unions are strong in Hackney and they’ve made this happen”.
Waterfall also explained that the minimum hourly rate for anyone directly employed by Hackney Council is £9.15, and although the security, cleaning and recycling services are outsourced to agencies that are allowed to pay less than the living wage, the Council are pursuing means by which these staff can be on London living wage by the end of 2013.
This was echoed by Jules Pipe, Mayor of Hackney:
"We welcome the decision to increase the London Living Wage from £8.30 to £8.55. As the cost of living increases it is vital that we continue to match any raise to ensure a decent standard of living for workers.
"Hackney Council has supported the initiative since its inception in 2005. As an employer we continue to ensure that all directly employed staff are paid above the living wage and through our tender process expect all our contractors to do the same.”
Musleh Ahmed, 29, owns Crescent Cars taxi service on Kingsland Road, Hackney. He believes that the London Living Wage is good in principle but is not implemented widely enough: “The London Living Wage is good, but the majority of people aren’t getting it. The government cuts benefits, and then extends the retirement age – not everyone will get there at this rate. The London Living wage would benefit everyone but in order for that to happen, they need to make it compulsory.”
Liz Stott, 24, manages Rove gallery on Hoxton Square, Hackney, and lives in Kilburn. Working as a freelancer in the arts, she believes that enjoying a job is just as important as earning money: "There is a fair amount of difference between the London Living Wage and the national minimum, and it would be fantastic if employers had to pay it, but it is possible to survive on less – I have. To me, enjoying a job is more important – obviously, because the arts don’t always pay very well. My friends and I would take less money to do something of interest."
Will Clements, 22, a labourer, lives in Hoxton. He is paid the London Living Wage and believes that were it to be enforced in London, it could do a lot of good.
"It’s a great idea because there’s so much disparity between certain areas of London; very poor borders very rich all over the city, but prices don’t really vary. I’m from Nottingham – it’s very cheap to live there. But in London, you need something like the Living Wage, because its so expensive."
Alicia Spinks, 23, is an Assistant Sales Manager at Oddbins, Earls Court, and lives in Whitechapel. She has a £1,000 supplement on her annual salary because she lives in London but still finds things difficult: "The supplement brings my salary up to being vaguely livable, but given my base wage it’s still difficult to make ends meet. When I first got my job, my employers told me I would be receiving the London Living Wage so I’ve looked into it quite a bit. I read a government commissioned report that found that the supplement should be around £3000 for people in London, which makes sense as rents here are crazy high, and tend to be aimed at those in the corporate sector. You won’t find a room for less than £6000 a year in London, and if you’re on, say, £12,000 like many people here are, then that’s more than half of your salary after tax.”
Candida Anderson, shopkeeper of This Shop Rocks: Vintage Clothes and Accessories on Brick Lane said: “It wouldn’t be enough. I can’t imagine anyone can live in London on the eight pounds or whatever it was he was suggesting. It’s so expensive to live in London I think anyway. It just seems stupid like all the other things he says.
“Obviously it’s not enough to live on. People would have to live way out of the area and then it would be far too expensive to travel in.”
Minhazul Islam Chowdhury, 25, part-time shop assistant at Brick Lane Mini Market said: "I’m a student so I’m doing a part time job here. I’m getting a good wage here anyway…My uncle is paying me a good wage…it’s a family business. I think the wage is okay - 8 pounds 50.
Living and everything is expensive. But I am living with my cousins so I don’t pay anymore money.
I know my friends are living behind the Whitechapel gallery…they rent a two bedroom house and they’re paying like 1800 something per month. So I think it’s quite expensive when you’re living life.”
Susan Janssen, 35, from Lewisham says: “I earn more but I think you can live on less. People should decide what [how much money] they want to work for , and people who hire should decide how much they want to pay for a job, how much they think it’s worth. English people are always complaining about Polish people coming in and taking jobs but they’re taking the jobs that English people don’t want. I’m Dutch and I think that English people should accept that they have to work for less money!"
Calculation of the London Living Wage takes several factors into account:
There are two figures used to make the initial calculation: ‘basic living costs’ and the median London income.
Basic living costs cover housing, council tax, transport, childcare and all other costs (a ‘regular shopping basket’), 60 per cent of the median income is used to ensure ‘income distribution’ is taken into account.
The average of these two figures is called the Poverty Threshold Wage.
Once the Poverty Threshold Wage has been found, a margin of 15% is added to protect against any unforeseen expenditures.
Wage necessary to cover basic London living costs = £7.10 per hour
60% of the London median income = £7.80 per hour
Poverty threshold wage = £7.45 per hour
London Living Wage (poverty threshold wage plus 15%) = £8.55
Minimum wage in the UK is £6.19 per hour, but for many types of household this does not cover the basic costs of living in London – it also creates some interesting disparities due to benefit thresholds, child care costs, and government child care contributions.
For example, a two parent family with two children where both parents work full time would only have £17 spare at the end of the week, whereas if only one parent worked they would have £68.28 left over.
However, couples with children seem to fare much better than those without. With the exception of couples where both parties are working full time, minimum wage is not enough to cover the basic costs of living for a cohabiting pair.
The vast majority of full-time workers in London are already paid at least the London Living Wage. However, over 10% of the capital’s full-time workforce are not paid the LLW, with 6.8% of employees not even receiving the poverty threshold wage. Remember, the boroughs of Hackney, Tower Hamlets and Lewisham are some of the most deprived in the capital.
A= Less than London Living Wage but more than the poverty threshold
B=Less than poverty threshold wage
[callout]Contributors: Hugh McCafferty, Emma Craig, Tomas Jivanda, Sophie Robinson-Tillet, Ellie Slee, Lautel Okhio, Alan Dymock, Sasha Filimonov, Laura Liszewski.[/callout]