Cooperatives and the idea of the Living Wage

I’ve written before on executive pay in cooperatives. What about pay scales at the other end?

Look at the list of UK companies which have signed up voluntarily to pay their staff at Living Wage levels (currently calculated at £8.80 ph in London and £7.65 elsewhere) and you won’t see many coops there. The Phone Co-op is an honourable exception, having joined the scheme last autumn.

But the Co-operative Group has not felt able to adopt the scheme. In response to a 2012 members’ motion from Central and Eastern Region, the Group reported back that it had calculated that the cost of adopting the Living Wage unilaterally would be around £52m. “A voluntary unilateral adoption of the Living Wage risks an employer disadvantaging themselves against competitors,” the Group pointed out.

On the other hand, AGM delegates also received a Board statement with the revealing comment that “in relation to the lowest paid members of staff (for example Customer Services Assistant (CSA’s) Food), the Group has, over a number of years, paid an hourly rate at a level above the National Minimum Wage, but often less than the hourly rate paid by the Co-operative Group’s main food retail competitors.” The statement went on to compare Co-op Group’s (then) hourly rate for CSAs of £6.25 per hour with the equivalent hourly rate in Morrison’s, Sainsbury’s and Tesco Express of £6.42.

What of other industries? Workers in the leisure industry are also poorly paid, and regrettably you won’t at the moment find the (normally highly regarded) social enterprise Greenwich Leisure (GLL) in the list of accredited Living Wage employers. One person trying single-handedly to change this is Alan Sealy, a member of the Chalfort St Peter leisure centre in Buckinghamshire (now run by GLL). Alan has contacted me to tell me of his efforts to persuade GLL senior management to think again.

“I have no doubt that the principal argument for GLL not paying the Living Wage is that if they did they would lose out on local government contracts,” he says. But, as he points out, increasingly local authorities are themselves committing to the living wage scheme – so there may well be growing pressure from authorities on GLL to follow suit.

I wish Alan Sealy well in his campaign. Incidentally, there’s a useful resource pack on the Living Wage issue produced by the Co-operative College. As this points out, the idea of paying a living wage has been a central theme of the cooperative movement for more than a century.

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One thought on “Cooperatives and the idea of the Living Wage

  1. Hey Andrew,

    I am someone very sympathetic to cooperatives and the idea of a living wage but every time I read something about it, I find myself with one burning question: won’t promoting this come back to haunt us?

    To explain, a living wage is always relative to average cost of goods and services in the area. If wages are considered a factor of production by most companies (including cooperatives) won’t a blanket in wages result in a general rise in prices of the same goods and services in order to maintain a similar level of profit? If so, what’s the point? In a worker cooperative, you can distribute some of the previous year’s surplus to supplement wages without impacting cost of goods but in a consumer cooperative, where price is everything, the surplus belongs to the consumers. I imagine the consumers will behave similarly to investors in their desire to depress wages in order to keep cost of goods down.

    Is there a way around this that I’m not seeing?

    Reply

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