Finding a way out of the current cost of living can be difficult. Prices continue to rise, and there are fears that if nothing changes, many families will face serious financial problems.
The effects will be devastating. Premature death due to poverty, poor nutrition, disease and fatigue. In the face of this obscure vision, effective leadership is needed to bring about change – but not just from the government. Businesses can also play an important role.
One of the things that any company can do to reduce poverty is to provide living wages to its employees. Our new report details how living wages benefit not only employees and workers, but also employers and society as a whole.
Receiving a living wage helps break the cycle of poverty by ensuring that wages are sufficient to cover household necessities as well as occasional urgent or unforeseen expenses.
Our expert interviewers report that paying a living wage can reduce stress levels and sometimes require extra work time to make ends meet. This means fewer sick days and overall employee well-being.
From a business perspective, this can lead to lower employee turnover, lower employment and training costs. Productivity may increase, and there are even early signs that entry-level wage increases may be associated with increased revenue.
We further discovered that as living wage commitments become more common, the benefits reach society further. Wage increases stimulate spending in the local economy, while reducing poverty and inequality can lead to greater social cohesion.
In short, our report (produced by Business Fights Poverty, Cambridge Institute for Sustainability Leadership and Shift) supports the growing evidence that living wages provide multiple benefits – beyond the experience of individual workers.
This will give traders the confidence to view wages not only as a net expense but also as a positive investment. After all, a business can only be as resilient as hiring workers.
Its widespread impact on society is also evident. We have seen that living wages not only have the potential to help alleviate poverty, but also address many of the UN’s Sustainable Development Goals. For example, one of the goals is “decent work for all”, and fair income is a key element of decent work. Tackling poverty can improve access to housing, food and health.
Fortunately, a living wage employer is becoming a new marker of business leadership, valued equally by investors and consumers.
In the UK, for example, IKEA, Everton Football Club and the Nationwide Building Society, just three of the more than 10,000 employers who describe the Living Wages Foundation as a “real life wage” are committed to paying. In practice this means paying workers a minimum of £ 9.90 per hour (ল 11.05 in London). Similar campaigns exist in other countries, including New Zealand and Canada.
Raising the bar
Some companies are moving further by increasing the promise of living wages to include their suppliers. In 2021, Unilever announced plans to move the company toward a living wage for people providing goods and services in areas such as logistics and packaging. To achieve this, Unilever is partnering with suppliers so that they promise and report at least a living wage to their employees.
Our report, which combines extensive analysis of previous research with many interviews, suggests that others should join them.
Dr. Annabelle Biels, co-author of the report with us, said: “Given the sheer scale of growing poverty, the transition to a living wage economy is urgent and we need more businesses to play their part. The decision to pay living wages pays a lot in return for their investment in business performance, resilience and stability. ”
To move things forward, investors and CEOs should now feel confident that paying living wages is a wise business decision. Meanwhile, the government may raise the statutory minimum wage to reach the level of living wages.
Consumers can also push for progress through the power of their spending decisions and the businesses they support. Businesses large and small need to play an important role in tackling the drivers of poverty – and this can lead to greater economic success.
Anna BarfordPrince of Wales Global Sustainability Fellow, Cambridge University and Jane Nelson, Director of Corporate Responsibility Initiative, Harvard Kennedy School
This article has been republished from Conversations under a Creative Commons license. Read the original article.