Implementing the living wage in UK local government

Abstract

PurposeThe purpose of this paper is to understand the impact of living wages on organisational pay systems.Design/methodology/approachThe research draws on 23 semi-structured interviews with HR managers, trade union representatives, and politicians at four UK local government case study sites.FindingsThe findings suggest that living wages can have a positive impact on directly employed workers in cleaning, catering and care services, but the research also finds that the localised adoption of living wages can lead to significant wage compression, resulting in a broad band of “low skill-low wage jobs”.Originality/valueThe theoretical contribution is twofold. In-line with earlier research the “first-order” effects of living wages are clear: hourly wages for a large number of women in part-time roles increased sharply. However, this is only part of the story as “second-order” effects such as ripples and spill-overs are less extensive than suggested by other studies. This is due to the limited scope for trade unions to restore wage differentials through collective bargaining, the slow progress in extending the living wage to contracted staff, and parallel processes of downsizing and outsourcing.