Setting a fair pay standard: the government as a fair wage employer

Setting a fair pay standard: the government as a fair wage employer
Document type
Smith Institute
Date of publication
1 May 2014
Smith Institute Research Papers
Trends: economic, social and technology trends affecting business, Management & leadership: including strategy, public sector management, operations and production
Business and management
Material type

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This research paper aims to show how much - or indeed, how little in the scheme of Government spending - it would cost to pay all low paid workers in Whitehall, including those employed indirectly through public procurement, the living wage. By setting out the cost of scaling up living wage coverage, the paper hopes to add to the increasing body of evidence about the living wage. It also adds to the debate about using living wages as a social policy instrument to tackle low pay. Introducing living wages clauses, for example, when contracting-out services could be a critical plank in a future UK Government’s policies to reverse the trend of in-work poverty.

It finds that the headline cost of paying all 31,413 Whitehall staff the living wage would be £18.3 million per year, including a contribution from the contractor. Even at a time of fiscal austerity, this seems a small price for HM Treasury and a significant gain for the cleaners and other low paid staff who work for government departments.

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