Is it truly a living wage?
28 April 2016
Jamie Wright, managing director at Incentive QAS, questions the impact that the new national living wage, introduced this April, will have on the cleaning industry
This April sees the introduction of a mandatory national living wage (NLW) for workers aged 25 and above, initially set at £7.20 – a rise of 50p from the adult national minimum wage (NMW) rate which is currently £6.70.
Let me be clear, I believe that everyone deserves to receive a salary that reflects the real cost of living in the UK. However, I also believe that this latest legislation not only fails to do that but it raises more questions than it offers solutions.
Firstly, why only the over 25s? We employ cleaning operatives that have left school with no education and choose cleaning as a career that they can learn as they go, with training provided. Why is it deemed fair that we can pay anyone under the age of 25 less money for completing the same job? Cleaning is not an easy job. In many cases it is tough manual labour that is very tiring, whatever age you are. Also how does this fit in with the age discrimination advice and legislation that we have all been following to the letter?
As a business we have taken the decision not to differentiate the pay rates for our staff based on age and I would encourage all cleaning companies to adopt the same approach. It doesn’t seem fair and is likely to have an impact on morale amongst younger team members and deter others from joining.
Numbers don't add up
Secondly, I’m not convinced by the numbers. By calling it a ‘national living wage’ the Chancellor has hijacked the term and it is at odds with the Living Wage foundation, an independent body who have set the ‘living wage’ at £9.40 in London and £8.25 for the rest of the country. Their calculations are made by the GLA in London and the Centre for Research in Social Policy (CRSP), against the basic cost of living in the UK. Last year Incentive FM Group was recognised by the Living Wage Foundation for showing leadership on this issue and we believe that these figures have much more credibility.
Wage bill pressures
Thirdly, who will cover what equates to a wage bill increase of 7.5% plus associated costs? This is much higher than any legislative or RPI increase incurred in recent times. As a business we will be working closely with our customers to ensure we can maximise productivity and review working practices, if we are in the situation where they cannot absorb such a large increase. Our clients have been generally understanding about the pressures this legislation brings to both them and us and we have worked together on a solution. However some clients inevitably see it as a ‘contractor issue’ so in those cases we have provided options and choices to help them work with us to implement the new rates.
That said, as an industry there is a strong chance that the result will be fewer jobs. Yes, we can continue to be innovative but the margins in our industry are extremely tight and there is little room for maneuver.
In conclusion our staff work hard to help keep our clients’ buildings and offices clean and I believe that every one of them deserves to receive a salary that not only recognises their skills and hard work, but also reflects the real cost of living in the UK. This needs to be within the context of the rising cost of rents and home ownership and take into consideration the fact that many people have to travel considerable distances to work. Despite the confusion and mixed messages I sincerely hope that this latest legislation is a step in the right direction.