London’s civil society is at the forefront of tackling poverty in the city. And they often hear depressing stories of its impact on peoples’ lives, particularly involving women.
Like parents in Newham, who don’t know what their children are up to and fear they will get caught up in the dangerous world of gangs, all because they are having to work seven days a week in order to feed their families.
Then there are stories of women who have lost all hope and are resigned to being exploited. They say that’s because it’s better to be taken advantage of by a person they know down the road for £5 an hour, rather than travelling across town to work at warehouse on a zero hours contract.
But perhaps saddest of all, are accounts of women being unable to pay their rent and then landlords asking for sex in return.
How we solve these issues as part of a wider mission to create ‘a city of good work for all’, was the focus for the inaugural meeting of the London Good Work Commission. The commission, established by London Plus and bringing together 20 leaders, many of whom are drawn from the voluntary sector, began by exploring how we end low pay and improve progression at work.
Here’s a brief summary of the key points to come out of the discussions.
A Living Wage City
One of our big goals is making London a living wage city. The recent appointment of Professor Arindrajit Dube to lead a review of minimum wages policy beyond 2020 provides a serious opportunity to see how higher rates for the capital could work.
In the meantime, more must be done to encourage employers to pay the living wage of £10.55 an hour in the capital. It is shocking that only 1550 employers in a city of 1.1 million private sector firms, are accredited living wage employers.
One commissioner said calling out bad business practices more could make a difference. They cited the example of the Intercontinental Group, owners of Holiday Inn and Plaza Crowne hotels. To secure status as official hotels provider for the 2012 Olympics, they promised to introduce the living wage for their workforce in the capital. Seven years later, they have still not honoured that commitment.
A place-based approach could also help to improve uptake of the living wage. For example, Dundee is using local anchor institutions (local authority, hospital etc) and an action group to help spread adoption of the living wage.
It was also argued that London should have more powers, with one commissioner comparing our “underpowered” city to those in the US, where mayors have the ability to regulate the local economy and introduce higher minimum wages. It’s worth noting that New York City has a $15 minimum wage, which is equivalent to £11.35.
We also heard how there’s a potential opportunity to embed the living wage through a new immigration model post-Brexit, with opportunities to work here tied to jobs having to pay the living wage. This would help push up wages for everyone else and would be a more business friendly approach than the government’s proposed £30k salary threshold for skilled foreign workers after Brexit.
Pay Equality
Pay disparity is another big problem, which has significantly worsened in the last decade. Your average FTSE 100 CEO now earns the typical salary of a full-time worker in just three days. The commission discussed linking pay rises for any directors to pay increases across the company, taking a similar approach with bonuses.
One of the commissioners argued such an approach doesn’t have to be enshrined in legislation. Pay ratios will be revealed in annual reports from next year, so the Mayor could use his procurement powers to favour companies that have better pay ratios.
It was also highlighted that some votes are taking place in US states on giving lower corporate tax rates for firms with better pay ratios. A similar approach could be adopted here with business rates.
Progression
The evidence shows that once people enter low paid work, they get stuck there, with only one in six escaping after 10 years, so the commission looked at how people could best be supported to progress.
One commissioner cited some of their emerging evidence that has found people progressing only if they switch employers, which shows firms aren’t investing enough in their workforces and progression pathways.
We heard how reforming the apprenticeship levy could make a difference to increasing apprenticeship opportunities (since its introduction numbers have dropped). Higher-level apprenticeships at the best companies is also key in attracting more young people to take them up.
We also heard of the impact of huge cuts to adult learning across London (64% in one local authority) and a lack of help for disabled people to retain their jobs and progress.
Work-Life Balance
The London Plus good work commission also began exploring the problem of overwork and poor work-life balance faced by so many Londoners, particularly the poorest.
We were told how there is a strong business case for moving to a four-day week, with increased levels of productivity, staff motivation and retention, and better health and well-being. A good example of this is the successful trial at Perpetual Guardian in New Zealand.
It’s important to stress, that some may wish not to move away from a five-day week but to work fewer hours each day, such as six-hour days. And others will prioritise being able to work remotely and hours that fit around their lives, as one of the commissioners has successfully embedded across his organisation.
So the commission will take a flexible approach to how we create good work-life balance for people in the capital. We will also seek to ensure any shorter working week doesn’t exacerbate or create new inequalities in the labour market, particularly as many low paid service roles require a constant physical presence.
Next Steps
The London Plus good work commission’s work will be heavily informed by the capital’s civil society, and over the coming months, we will be gathering evidence and developing our ideas, which will include hosting London’s first ever Good Work Citizens’ Assembly.
If you would like to contribute and help shape our agenda for creating good work for all in the capital, we’d love to hear from you.
