I’m paying my staff a real living wage – not George Osborne’s version

Business owner Martin Whitlock writes in The Guardian that the government tinkers with terminology but ignores the real problem: that pricing and profit margins are locked into a low-wage framework.

Running a service station is more complex than it looks. At Parkfoot garage, at West Malling in Kent (of which I am a director) we employ more than 30 staff at a business that never closes.

The heart of the operation is no longer the self-service petrol pumps, nor even the automated car washes, but a large shop that combines off-licence, butcher (employing four), florist, baker, hot food counter, general grocer, newsagent and tobacconist.

Keeping all this going 24 hours a day requires commitment and flexibility. The company needs staff who will stay, learn their trade and adopt its service-led values.

The company has been paying the living wage for several years, and our motivation is twofold. First, it provides the staff with a real benefit – they realise how well off they are, in comparative terms. In an industry where the minimum wage is the norm, paying the living wage significantly improves their standard of living. They feel valued and they give us commitment in return. Most importantly, they stay. Many have been with Parkfoot for 10 years or more.

The second reason is more subtle but arguably more significant, in the broader picture. As owners of the business, we receive both remuneration for our own work and the benefit of the profits that the business generates. The market approach to profit is to maximise income while spending as little as possible in the process. But when much the biggest item of spending is staff wages, this poses an ethical dilemma. As owners we don’t know, in absolute terms, how much of the business’s proceeds belong to us and how much to our workforce. And even when we think we know, we don’t necessarily agree.

The living wage provides a framework for answering this question. It has the great advantage over the minimum wage of referencing what people actually need to live on rather than an economist’s concept of “what the market can bear”.

Read the full commentary in The Guardian.

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