Labour market
·
Pay
·
Living Wage

Beyond the Bottom Line: The challenges and opportunities of a living wage

Matthew Pennycook
Matthew Pennycook
Kayte Lawton
Kayte Lawton

Beyond the Bottom Line, a joint report from the Resolution Foundation and IPPR, presents the first full economic analysis of the living wage in the UK, including: modelling its potential impact on labour demand and considering the potential costs of living wages for employers; analysing which workers and families benefit most from the living wage; and quantifying the fiscal savings to government of wider living wage coverage. 

The report sets out the key lessons that emerge from this analysis and makes recommendations for how campaigners, employers and the state can work together to ensure many more workers benefit from the living wage.

Key findings

  • For over a decade the living wage has served as a rallying cry for decent pay above the national minimum. Harnessing the power of social norms, it has raised the profile of working poverty and has broadened the debate about low pay. Much of the idea’s power lies in its simplicity; the view that working people should be paid enough to afford a minimum acceptable standard of living. And much of its vibrancy lies in a bottom-up, community organising approach, which has caught the imagination in a world in which worker empowerment was often assumed to be in serial decline.
  • The question is: how can public policy support a civil society campaign without undermining these great strengths? The answer will not be a Whitehall diktat and nor is it likely to be a single, simple policy ruse. Government will need to find ways of working in partnership with business, workers and civil society and adopt a mixture of approaches, leading by example, unleashing data into the hands of campaigners, raising the heat on social norms, and finding new ways to reward local areas for innovation. One thing is clear: progress is both possible and desirable, not least for the public purse. Ultimately, though, it will come down to leadership from employers, unions and campaigners.

Further reading

Labour Market Outlook Q2 2024
Happy 25th birthday to the minimum wage
·
Nye Cominetti, Hannah Slaughter
A U-shaped legacy
Taking stock of trends in economic inactivity in 2024
·
Louise Murphy
We’ve only just begun
Action to improve young people’s mental health, education and employment
·
Charlie McCurdy, Louise Murphy
Matthew Pennycook
Matthew Pennycook Former Senior Research and Policy Analyst
Kayte Lawton
Kayte Lawton