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08 October 2013

Most evangelicals back the Living Wage

Most evangelicals back the Living Wage

by David Landrum 

As our economy wobbles along, we have seen prices rise for the things we all need such as fuel and food. Alongside the growing demand for food banks and debt-counselling services, it is notable that this squeeze in our pockets extends beyond the ranks of welfare claimants to affect the low paid 'working poor'. All of which has started a political debate about the cost of living, and therein the issue of pay.

Although stagnating wage levels and high inflation has depressed annual income by 13 per cent since 2008, this situation presents us with some difficult questions such as: what is a fair level of pay in a complex and fluid labour market? A lot of people now often have multiple jobs, part-time jobs or zero-hour contracts. How can pay be regulated for all in a free-market economy? We tried that before and it didn't work because it damaged the competitiveness and stifled enterprise. And what's the acceptable gap between the highest paid and the lowest paid? As bankers, fat cats and footballers continue to be paid preposterous amounts of money, while the majority of hard-working people struggle to pay the bills, how do we reward excellence while ensuring fairness?

One suggested solution to these thorny questions is to introduce a national Living Wage. Unlike the minimum wage (currently £6.31 an hour) which is a legally enforceable level of pay, the Living Wage (now set at £8.55 an hour in London and £7.45 an hour in the rest of the UK) is an informal benchmark of the rate of pay needed to allow workers to lead a decent life. Clearly, how these figures are calculated is critical, and it's worth noting that while the minimum wage operates via regulation, the Living Wage operates (presently) via stigmatisation. It is estimated that nearly five million workers in the UK earn less than the Living Wage.

Given the biblical view of work and pay it's perhaps not surprising that our recent report Working faithfully? showed that over 75 per cent of evangelicals support its introduction. Because God cares about justice, whether it's taxes or wages the Bible has much to say on the issue of pay.

"You shall not oppress a hired servant who is poor and needy, whether he is one of your brothers or one of the sojourners who are in your land within your towns. You shall give him his wages on the same day, before the sun sets (for he is poor and counts on it), lest he cry against you to the Lord, and you be guilty of sin" (Deuteronomy 24:14-15).

Within a consistent narrative that work is good and that "the labourer deserves his wages" (Luke 10:7) we are shown that: cheating people of their due wages is wrong and dangerous (Genesis 31:7, Jeremiah 22:13, James 5:4); and that treating employees fairly honours God (Ephesians 6:9).

Human nature and sin explain how we have got into such a pickle with pay, but there are many who argue for the benefits of a laissez faire approach. Employers benefit from low pay by increased profit margins. But the problem here is that the state effectively picks up the tab by subsidising the wages of employees with benefit top-ups, such as Family Tax Credits. Consumers benefit by getting cheaper goods and services – more value for money. However, in the absence of a politically-agreed and socially-acceptable rate of pay it is inevitable that, over time the gap in disposable income between the rich and the poor will simply widen.

It could be said that any short-term gains of rich employers and consumers through low pay is countered by the long-term impact of impoverishing large swathes of society. Also, the prospect of working for pay that isn't enough to live on won't really help to incentivise people off benefits. The truth is that, despite any momentary illusions of economic vibrancy, when we pay unjustly low wages everybody loses.

An hourly rate for a Living Wage is not a silver bullet solution to the exploitation associated with things like zero hours contracts and employers dodging their responsibilities by declaring all their staff to be self-employed etc. But it does send a signal and offer a model of good practice. Furthermore employers who have adopted the Living Wage have found that it boosts staff morale, employee loyalty and skills retention, and that increased productivity may lead to better profits in the long-run.

The UK is clearly never going to compete with sweat-shop economies in the 'developing' world, and neither should we try to. If we truly want to consider ourselves to be a 'developed' country, then we should take a lead in setting standards of dignity and social responsibility for others aspire to – by paying a fair day's pay for a fair day's work.

As ever, the Church needs to set the tone for society, both in the way it employs people and in the way it speaks up for those who are being exploited. Consequently, although the details need debating, the principle of a Living Wage should be welcomed by all who worship a God of justice and mercy.

For more information about the Living Wage see:

At www.eauk.org/snapshot you can read and download Working faithfully? - our report on evangelicals' experiences and opinions of the world of work - and also access discussion questions to explore issues of work and unemployment further with your church or small group.