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Economic Justice

An ethical and economic case

Equality and the taxpayer stand to benefit from the further spread of the living wage, argues Barrow Cadbury Trust Communications and Programmes LLW Intern, Sapphire Mason-Brown.


The UK’s minimum wage is to rise to £6.31 for adults and £5.03 for 18-to-20-year-olds with business secretary Vince Cable stating that “Nobody in the country should be paid less than the minimum wage”. Some commentators have raised the question of whether the minimum wage keeps up with the cost of living and this question is an interesting one, as despite the number of times it has been raised and words expended asking it, the answer is quite simple: alas, no. Since 2009 minimum wage increases have regularly fallen behind the rate of inflation leaving minimum wage earners paying more for goods and services without their wages rising in line with this. Vince Cable is just in saying that there is a wage that nobody in the country should be paid less than, but is this wage a minimum wage?


When we speak of the cost of living, this is often within the context of the welfare state and whether benefit payments are too great or too small. However, in-work poverty is common with many simply not earning enough to provide for themselves and their families. This is a problem that the younger sibling of the minimum wage, the living wage, looks to address.


When advocating the living wage, there is a tendency to separate between moral and economic benefits, however, any discussion should give consideration to both. Ensuring employees are paid a sum that doesn’t leave them living in poverty or on the brink of poverty is the ethical thing to do and is one of the soundest means of “making work pay”. Since the inception of the Living Wage Campaign in 2001, 45,000 have been lifted out of poverty as a result. More than just a concept that politicians pay lip service to, the living wage has elicited change in the way its advocates intended, and with the Trust for London estimating that all low paid workers in London alone being paid the living could save the government £823 million per annum, the economic benefits are apparent.


Young workers are much more likely than their older counterparts to be working for a low wage. In addition to this, there is the expectation that many young people work for no pay as a precursor to finding a paid position. Whilst youth unemployment continues to rise, in many sectors young people are pressured to take on unpaid positions simply to get their foot in the door.


As an intern I’m highly aware of the trope of the suffering unpaid intern, forever bearing a heavy load of work that should be assigned to a paid staff member. Tanya De Grunwald of Graduate Fog has waged a war against this calling out organisations that take on unpaid interns for positions that should be filled by paid staff. One firm that has incurred her wrath is French fashion house Balenciaga for their request for unpaid sales assistant interns; a position involving all the features of working as a sales assistant with none of the financial returns. An option only available to those financially stable enough to generate no income for a prolonged period of time.


In a period where youth employment prospects are particularly low, many see these unpaid options as a necessary stepping-stone. At first glance it may seem counter-intuitive to spend four weeks working as a sales assistant for no pay, but the opportunity to say that you’ve worked for a high-brow fashion house may be just what someone wishing to crack the seemingly impenetrable world of fashion is looking for.


What this says about employment prospects is sad, at a time when youth unemployment is rising; numerous organisations take advantage of a desire for that coveted concept – experience.


An adoption of the living wage for all workers including interns is not something that will happen overnight, but whilst it is accepted that some people are paid less than they need to survive on, or nothing at all, the problem of in-work poverty will continue to increase and some sectors will continue to have barriers to entry which exclude those from a lower socioeconomic background. Organisations becoming living wage employers begin to solve these problems and in doing so, they step closer to becoming ethical workplaces that practise equality and diversity through genuinely facilitating inclusion.