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The real Living Wage in the charity sector

9th March 2017, 10:12

We are pleased to share a blog from Sandy MacDonald, Head of Sustainability at Standard Life, reflecting on the real Living Wage in the charity sector.

Sandy MacDonald of Standard Life blogs: the real Living Wage in the charity sector.

Recently I had the privilege of chairing a discussion at SCVO’s ‘Gathering 2017’ on the topic of how grant-funding can enable charities to pay the real Living Wage.  Storm Doris conspired to keep some people from reaching our event, but because we don’t want anyone who wanted to hear this important message to miss out, I decided to do a short write-up.

I was joined on the panel by Emma Kosmin, from the Living Wage Foundation; Jack Evans from the Scottish Living Wage Accreditation Initiative, and Dionne McNicol from Who Cares Scotland?

Emma began by providing the context. The Living Wage Friendly Funder commitment was born out of a desire by funders like Comic Relief and People’s Health Trust who were already accredited Living Wage employers and wanted to take their commitment further and use their grant-funding influence to help support payment of a Living Wage. Like the Living Wage Employer status, it is a wholly voluntary, positive solution to the problem of low paid work.

Those working in the third sector may be all too aware of some of the issues that exist with short term funding and pressure on wages. As Emma explained:

  • According to NCVO, hourly pay in the charity sector is a pound an hour lower.
  • Two thirds of the charity sector’s workforce are women (with women much more likely to experience low pay generally).
  • Almost 2 in 5 charity workers are part time; this is significant because across the workforce 43% of part time jobs pay below the Living Wage.
  • The third sector reaches into a number of key low pay industries including health and care; the arts; sport and youth work.
  • Only 0.4% of UK charities have become accredited Living Wage employers.
  • On average, when charities accredit they give 8 people a pay rise and the greatest impact is on part-time, in-house staff.

Jack shared the Scottish context. Although there are some reasons for celebration – for example, the proportion of Living Wage employers who are charities is much higher north of the border – some patterns are the same, including the greater numbers of women and part-time workers and the low pay generally within the sector.

A pay rise to the Living Wage makes a difference of £95 a week in London and £45 a week outside of London, compared to the legal minimums.  Dione from Who Cares Scotland? really brought this to life. She told us about the difference being paid the Living Wage has made to her life. From the self-esteem that comes from feeling you’re contributing equally to household income, to being able to not worry about the cost of baby food, it makes a real, human difference. It means healthier food; more sleep; more time with family and less anxiety and stress.

The Living Wage movement has helped to inspire the Government’s ‘national living wage’; a higher minimum for staff over 25, which was introduced last year. But the Government’s rate is not calculated based on the cost of living, meaning it doesn’t take into account inflation or the cost of rent, transport or childcare from year to year.  The legal rates also don’t apply for those between 18 and 25, a topic which came up in discussion at our event.  Not everyone between those ages is fortunate enough to have other options open to them for accommodation and other living costs.

It was the general consensus that meaningful, sustainable employment which pays a Living Wage is important for everyone to give them control over their circumstances. Some discussion focused on broader welfare changes, and how they are also impacting individual circumstances creating a greater need for a real Living Wage, but also broader factors like access to, and quality of, employment for excluded groups.

As I find is often the case, much of the discussion focused on the challenges some organisations would have in transitioning to paying the Living Wage, especially when charities are not always in control of their income and are reliant on others being willing to pay grants at a level that enables charities to maintain costs. This is exactly the role the Living Wage Friendly Funder movement is trying to play. The evidence that once a transition has been made, the Living Wage can lead to higher employee engagement and productivity, and lower absenteeism and turnover (and associated costs) is there. Enabling payment of a real Living Wage is a positive, voluntary solution and current Living Wage Friendly Funders will always ensure that they are being as supportive as possible. This includes not judging and not ever imposing paying people the Living Wage if it is problematic for an organisation. It is all about making sure that if they want to, they can.

Charity workers perform some of the most challenging and important jobs in our society, and they deserve to be paid at least enough to meet the true cost of living. Paying the Living Wage is the right thing to do and it’s important that charities are part of the movement of thousands of employers who are proudly displaying the Living Wage Mark.