A significant shift in business thinking appears to be underway when it comes to pay. Guy Stallard of KPMG is a leading advocate for the living wage and serial tweeter @Guy_Stallard. Today he was egging on Labour's shadow spox for Business, Chuka Umunna, and Work and Pensions, Rachel Reeves, ahead of today's vote on Labour's plan to increase the National Minimum Wage to £8 by 2020. Stallard thinks political leaders should be congratulating Living Wage employers for doing the right thing. We won't have long to wait to see if any politician applauds those enterprises, large and small, charities, and publicly quoted that are proudly accredited living wage employers.
Today's debate highlights the feebleness of Labour's current position over pay in response to the cost of living crisis. It stems from a leadership failure to be clearly define the Labour Party's new relationship with the business communities post-crash.
Pay - a living wage - is an opportunity to be crystal clear about that new relationship. Pro-business, yes, but. There are various ways in which government can shift behaviour. It requires budgetary commitment. Government itself must become a living wage employer. That means all its contractors have to do the same, not just for the purpose of securing a particular contract, but in order to bid for government work at all.
Then there is the rest of the economy, where there are still some firms acting illegally and not even paying a NMW. There has to be a blitz on non-papers, and others who have found devious ways of cheating their employees.
Next, there are carrots. A year ago Ed Miliband promised tax breaks to reward firms that do pay a living wage, and those that need some encouragement. They would have to pay some taxes in the first place to enjoy any benefit. But that issue is outside the scope of this post.
Then there are those businesses that cry poverty. Well, handsome is as handsome does. There is no reason in practice and every reason in principle why reluctant businesses should be audited or means-tested. Failure to pay a living wage results in demands on the public purse in the form of working tax credits. It is the businesses that are the scroungers and should be clearly labelled as such, not low paid workers.
There is precedent as currently being shown in Ecuador as reported recently by Left Futures https://www.leftfutures.org/2013/02/living-wage-ecuador-shows-the-way/
Ed Miliband has an opportunity to set out this new approach in Living Wage Week early next month. Don't hold your breath.