DOD’s blog: Pay a living wage so State benefits are not needed

Why should taxpayers subsidise the employment of staff?

This week the government announced that in October the minimum wage for adults will increase to £6.31 an hour and that compliance to this law will be enforced more strongly.

While this is to be welcomed, I even more strongly back the Living Wage campaign which calls for a minimum hourly wage of £7.45 (£8.55 in London). As the Living Wage Foundation says: work should be the surest way out of poverty.

Sadly, the current minimum wage is too low to live on without being topped up with State benefits. It seems like madness to me that, at a time of austerity, the government (using taxpayers’ money) has to subsidise the employment of people.

Instead of using time to pass legislation such as the employee ownership scheme that few think will work, it would be better if governments, of whichever hue, got down to basics and fixed minimum pay rates.

And yes, I do know that the vast bulk of State benefits are in fact State pensions, so any savings on other State benefits would only make a relatively small dent. I also know that paying more will be hard for many employers.

But clearly I, and many employers – including many well-known employee benefits suppliers in our market – do believe it is right to pay a Living Wage, and have publicly signed up to do so.

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Debi O’Donovan

@DebiODonovan