Why the Living Wage could help 240,000 working people in the North East

One in four working people in the North East are not paid enough to support a basic standard of living. Antonia Paget looks at the issue of the Living Wage

Owen Humphreys/PA Wire Cash, money, currency
Cash, money, currency

Janet Green leaves the house before five in the morning every day to get to work, and she doesn’t return home until around 7pm.

She works up to 50 hours a week as a cleaner at South Tyneside Council, and she is paid £6.54 per hour. For the last five years, Janet has also been the main carer to her disabled husband Jim. He has no use of his left arm, and is an epileptic.

She said: “The pressure of caring for him is immense. To keep the roof over our heads and the food over our table I have to work such long hours to make ends meet.

“If I was paid more I wouldn’t have to get up and leave the house before five in the morning.”

When Janet comes home, she has to help Jim wash and do the cooking and ironing.

Janet Green, a cleaner at South Tyneside Council
Janet Green, a cleaner at South Tyneside Council
 

“I also have to do things that I never used to do, like painting and decorating. Jim always used to do them, but now he can’t. When I come in from work, I spend another two-and-a-half hours doing the housework before I sit down and relax, by which time i’m ready for bed, and then up again at five in the morning.

Janet’s situation is not unusual in the North East, where the amount of people paid below living wage is at a shocking high.

“I know lots of my colleagues are in the same position as me, whether they be single parents or their partners don’t work,” she said. “A girl I know at the council works seven days a week and up to 58 hours. She does one job for the council and two other jobs for another firm, cleaning and serving school dinners. She starts at six in the morning and works until eight at night.

“She needs to do that to pay her mortgage and keep a roof over her head. Another lady works seven days a week, but if we were paid a living wage, she could give up her weekend job and spend time with her family.”

Janet’s story is just one of the testimonies that is helping change attitudes in the North East.

As a result of her story, and the experiences of several others, South Tyneside council will start paying the living wage - the amount recognised as being able necessary for a worker to meet their basic needs - by 2016.

After an announcement on Monday, this new rate will be £7.85.

But some employers in the North East are heading the change and becoming living wage accredited employers.

Construction company Hodgson and Sayers, based in Stanley, Country Durham, have just been accredited by the Living Wage Foundation in September.

The company, celebrating its 35th year anniversary, wanted to recognise the work of the business over the decades. Becoming living wage accredited was just a small part of this celebration.

All 107 employees at the company, and the 17 apprentices, will all be paid the new set living wage.

Mike Wade, Financial Manager at Hodgson Sayers
Mike Wade, Financial Manager at Hodgson Sayers
 

Finance manager Mike Wade said: “We recognise that we want to be the employer of choice, and what our accreditation has done is recognise our place in the heart of the community.”

Mr Wade has been working at the company for five years said it is important to think of the living wage in terms of the people it is paid to, not in terms of the balance sheets.

“The difference between paying someone a living wage and a national wage ultimately only boils down to about £35, per week, per employee.

“And the difference for an employer in paying this amount, is small in relation to the effect it has on the employees. The difference for them is starting to think about a family, or taking out a mortgage, instead of living in rented accommodation.

“We’re talking about principle wage earners here. If they are worrying about paying their gas or electricity bills, or how to put food on a table, they become a less effective employee.

“Especially in construction work, health and safety is key. You can’t have someone worrying whether their wife can afford to put petrol in the car to take the kids, to school when you’re seven stories up a building somewhere.

“It’s not right from a health and safety point of view. And it’s certainly not right from a moral point of view. But all of those stresses are reduced by the simple fact of us paying a proper wage.”

Mr Wade also said that the living wage is crucial in promoting the values of Hodgson and Sayers.

He said: “We recognise that we want to be the employer of choice, and what our accreditation has done is recognise our place in the heart of the community.

“As an accountant I’ve always been told there are three important things in business: revenue, profit and cash. But there are three other words that are more important. Honesty, decency and integrity.

“That’s what we want from our employees, and thats what they want from us. And as part of decency, isn’t it right that we treat people decently.”

Mick Thompson, KPMGs Newcastle Office Senior Partner
 

Newcastle-based communications company, Organise Consulting, is another company determined to encourage other businesses to pay the living wage.

The company is looking to double its staff and take on another 50 living wage positions in the next six weeks.

Founder and manager Mike Joslin started the company two years ago at his kitchen table.

He said: “I am in business not just to make money, but because I want to create a company and a service that creates social change. Businesses should be a force for good.

“But too often businesses see employees as cattle. But they’re not, they’re the foundation of any strong business, and to succeed in business you have to treat your staff well.

“From a business and a moral standpoint paying the living wage isn’t just the right thing to do, its imperative.”

Mr Joslin also emphasised the relationship forged between staff and their employers through the living wage, saying it creates a “stable” company.

“We have a low staff turnover rate as people want to stay with us because we offer financial stability. It’s the responsibly of businesses to behave responsibly and focus on people, if you focus on people then the profit will come. We treat people as they deserve to be treated, not as objects that are used to make money.”

The new rate for the living wage puts it 21% higher than the official minimum wage. The campaign for all employers to pay the amount has particular resonance in the North East, where 25% of people in employment are paid below that rate, the second highest rate in the UK.

Mick Thompson, North East office senior partner at accountants KPMG - one of the principal partners of the Living Wage Foundation - said: “Unless wages rise, nearly a quarter a million employed people in the region earning below the Living Wage will see themselves caught between the desire to contribute to society and the inability to afford to do so.

“Business benefits of the Living Wage include higher retention and productivity, and over 1,000 responsible businesses recognise this. The Living Wage may not be possible for every business, but is certainly not impossible to explore the feasibility of paying it.”

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