E&E | City vows to tackle low wages

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20 June 2013

City vows to tackle low wages

by Gordon Richardson

EXETER City Council has pledged to pay all its staff a ‘living wage’ – and is urging other employers to follow suit.

The plans will mean a pay rise for 56 of the authority’s lowest paid workers, mostly street sweepers, refuse collectors and recycling centre staff.

The move will cost around £100,000 a year – money council chiefs say they can afford after slashing senior management costs by £1m. Raising wages of low-paid staff is also expected to reduce the city’s benefits bill.

It comes after a report revealed how average earnings in Exeter have failed to keep pace with the rest of the South West and the country as a whole over the past decade.

The Living Wage Foundation campaigns for employers outside London to pay at least £7.45 an hour – equivalent to an annual salary of around £14,300 – to enable full-time workers to maintain a safe, decent standard of living and allow people to save for future needs and goals.

The legal minimum wage is currently £6.19 an hour for employees aged 21 or over, falling to £3.68 for 16- and 17-year-olds. Apprentices can be paid as little as £2.65 an hour.

Councillor Rosie Denham, the Labour-controlled authority’s portfolio holder for economy and tourism, is to lead a new forum set up to examine the issue of low wages and the cost of living in Exeter.

Explaining why the council plans to increase the wages of its lowest paid staff by up to 16 per cent, she said: “We believe this is a progressive and fair way to get people out of relative poverty and to reduce benefits. This is about the city council doing what’s right for our staff and also leading the way.

“We have an ambition to become a Living Wage city but we recognise that this isn’t necessarily going to be easy for businesses. It’s obviously a difficult economic time.

“We recognise it’s not something you can do overnight but we want to have that discussion with businesses.”

Median average annual earnings in Exeter, at £22,100, are £4,500 below the average for England and Wales.

The city lags behind Plymouth, where the average annual full-time salary is £24,000, and Bristol, where it is £25,500.

Between 2002 and 2012, average salaries rose by just 21.4 per cent in Exeter, compared with an increase of 30.4 per cent in Plymouth, 28.8 per cent in Bristol and 29.5 per cent in the South West as a whole.

Council leader Councillor Pete Edwards said: “Paying people a ‘living wage’ helps reduce poverty and dependence on benefits. It also means there is more money to be put back into the local economy.

“These are difficult financial times for everyone but there are things we can do to pull ourselves away from this challenging position and that is why we are taking a lead and proposing that all our workers are paid at least a ‘living wage’. We hope other businesses in the city might follow our example.