It has the backing of the main political parties while supporters say that it has the potential to lift millions of working families out of penury to ensure they enjoy a decent standard of life.
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The General Election spotlight fell yesterday on the Living Wage with senior figures from all three main parties – including Ed Miliband and Nick Clegg – addressing a Citizens UK mass rally in support of the benchmark rate intended bring an end to poverty pay.
Its aim was to persuade employers – both public sector and private – to pay staff enough to cover their basic living costs, including food, clothing and housing.
The modern Living Wage campaign began in 2001 in the East End of London where parents earning the national minimum wage – brought in two years earlier by the then Labour government – found they were still struggling to make ends meet.
Following a series of campaigns, a breakthrough came in 2005 when the Greater London Authority agreed to set up a Living Wage Unit to calculate the first Living Wage for the capital.
As the campaign developed into a national movement, the Centre for Research in Social Policy at Loughborough University began drawing up a UK-wide minimum income standard.
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Unlike the minimum wage, which is backed by law, the Living Wage campaign relies upon convincing employers of the benefits of adopting it to both themselves and their workers.
It is currently set at £9.15 an hour in London and £7.85 an hour in the rest of the UK – significantly higher than the minimum wage which is £6.50 an hour for adults aged 21 and over, and £5.13 for those aged 18 to 20.
A report last year by the independent Living Wage Commission chaired by the Archbishop of York, Dr John Sentamu, said government should ensure all its employees receive the Living Wage.
It said that firms that could afford to pay it should also do so, although it said that it should not be a mandatory requirement – particularly if jobs are at risk.
All three main political parties back the Living Wage in their manifestos. The Conservatives say they will continue to encourage businesses and other organisations to pay it “whenever they can afford it”.
Labour says it will use government contracts to “promote” the Living Wage, with tax rebates for businesses who sign up to pay it in the first year of a Labour government. It says that it will also require publicly listed companies to report on whether or not they pay it.
The Liberal Democrats have promised an independent review to consult on setting a “fair” Living Wage across all sectors.
They say that it would be paid in all central government departments and their agencies from April 2016, while other public sector employers would be encouraged to follow suit.
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