The London Living Wage is currently £8.55 per hour.
The UK Living Wage for outside of London is currently £7.45 per hour.
Of course we ALL want to earn more, but to make everything more sustainable don't we need to stabilize the economy first? Is it not better to earn a wage then to be made redundant because the company had to cut back or even shut down?
There are talks of a living wage wage at the moment, which I know is only voluntary, but to me it looks like a back door way to force businesses into paying higher wages. By stating things such as "Government Contracts should only be given to companies that support the living wage" is to me a threat to those businesses that live of public sector contracts. Considering the large cleaning contractors only charge £8.50 -£9 per hour to their client. Effectively everyone will raise their hourly rates to make up for the costs and it will still hit the low income earner at the end. Raising costs in childcare, factories and other places where usually minimum wages are paid. We will feel it at the buying end. Which means more companies will export their production.
Yes wage rules are there to protect workers in the cleaning industry and others industries of course, but how can we ensure competitive rates and good competition. How can small cleaning companies or even SME compete? Ok, small companies are able to charge £12-£14 an hour for their cleaning, but they will be restricted in their growth and large companies that charge per quantity will have to raise their costs to nearly £10 in order to stay sustainable. No change in profit margins as such, which means companies who could be giving their employees higher bonuses for doing a good job, will have to consider paying them less bonus or not raising the bonus schemes.
Is the Living Wage a Living Nightmare?
There are thousands of people in UK who are working in the cleaning industry. Cleaning companies also employ a sizeable number of subcontractors. As there is talks of a Living Wage in UK, this could mean many clients will prefer to do the jobs themselves or even reduce the number of people who will be cleaning for them.
Or small cleaning companies will have to close making their staff and themselves redundant and seek employment too.
Raising living standards?
Employees on the Living Wage will only benefit if they are live a restricted life (no childcare etc) . This means they will be paid more and that could raise their living standards. The amount of money they will be paid means they will have more to spend on basic life necessities. With a lot of money, they can then invest in other areas and even improve of their living conditions. HOWEVER, if they are like the many people in the UK who have to pay for their childcare, means earning more will affect their working and childcare tax credits and other cost around them will go up to. Depending on each family if they will be better off or not.
Increase cost of labour
On a surface level, the raise in the minimum wage for cleaners in the UK means the cost of labour will increase up ie using recruitment agencies etc. It will be an expensive affair for employers to hire more workers. To an average cleaner it is good for them, but it is the employers who will face the most difficult task as they will have to create an extra budget allocation to cover for additional staffing costs. But were will the cost come from?
Increase in competition
Paying a Living Wage will pull many people out of business, the less surviving cleaning companies will be overwhelmed with many clients. This means employers will be competing with the few available cleaner resources that can be found in UK.
Maybe I am just looking at it from the wrong angle, and I am looking from the angle of an employer and an employee, I am struggling to see the point in this. Surely statements such as giving contracts to only companies that will pay the Living Wage can't be the answer. It won't help an individual, it won't help the companies not the economy. The ONLY ones who will benefit from this is the Tax-Man who will take taxes out of our salaries, because we are earning more money.
It's just my personal opinion, sure some of you will prove me wrong :-)