Corporate Social Responsibility (CSR) Series - The living wage in the United Kingdom

The Living Wage in the United Kingdom – Civil Regulation and the Employment Relationship

The issues of low pay and in-work poverty have risen up the policy agenda in the UK and many other countries in recent years. One method to deal with these problems that has emerged in the UK in recent years is voluntary regulation. Since the early 2000s there has been a Living Wage campaign in the UK, which has sought to persuade employers voluntarily to pay a decent wage, substantially above the statutory minimum, to both direct and indirect employees (i.e. the employees of contractors located on their premises). Since 2011 this voluntary labour standard has been promoted by the Living Wage Foundation, which calculates the value of the Living Wage on an annual basis and accredits employers who sign up to the standard. Currently in Britain there are about 5000 accredited employers who directly employ nearly 2M workers.

The paper seeks to evaluate this experiment in voluntary wage regulation. It will do this through five primary means: 

1. It presents an analysis and critique of the standard itself, seeking to identify its beneficial and less beneficial characteristics.
2. It presents data on the diffusion of the standard and on the characteristics of employers that have agreed to pay the Living Wage. Central objectives here are to identify the reach of the standard and to measure the extent to which it covers low-wage industries in which the problems of in-work poverty are concentrated.
3. The paper presents original survey data on the benefits and costs of the Living Wage for accredited employers, identifying the types and scale of effect the standard is believed to have generated.
4. The paper presents further original data on the benefits to employees of the Living Wage, measuring the scale of value transferred to workers through the scheme and identifying which types of worker are most likely to benefit.
5. The spillover effects of the Living Wage are identified, including the incorporation of the standard into collective bargaining between employers and trade unions and its influence on public policy.

The paper draws upon a range of sources of evidence which include: a database of all accredited Living Wage Employers, a survey of accredited employers carried out in 2016 which yielded 849 responses (30%), a programme of interviews with more than 40 trade union and employer representatives, and observation of Living Wage campaign events and meetings. Civil or voluntary regulation is a notable feature of many national labour markets and this study presents an original evaluation of regulation of this type in the field of pay.

For further information, please contact Dr Matthew Davis at M.Davis@leeds.ac.uk

About the speaker

Edmund Heery is Professor of Employment Relations at Cardiff Business School and is an experienced researcher and writer in the field of Industrial Relations/Human Resource Management. Ed’s interest in the Living Wage stems from earlier research on the role of civil society organizations in shaping employment practice, which stretches back more than a decade. Together with Deborah Hann and David Nash he is currently working on The Real Living Wage: Civil Regulation and the Employment Relationship for publication by Oxford University Press in 2020.

David Nash has been Lecturer in Employment Relations at Cardiff Business School since 2003.  Before coming to Cardiff he was a researcher at Cambridge University, where he also completed his PhD examining the use of variable pay in the financial services sector.  David’s research has concentrated on the areas of employment regulation and workplace conflict resolution.  He is currently undertaking research into the voluntary Living Wage campaign in the UK.  He has undertaken research projects for the UK Government, the Bevan Foundation and the Advisory, Conciliation and Arbitration Service.  David’s published work includes articles in the British Journal of Industrial Relations, Economic and Industrial Democracy, Industrial and Labor Relations Review, and Industrial Relations Journal.

This seminar will be followed by an in-depth discussion.