Top City investors urge UK firms to pay living wage
Some of the City’s biggest investors have written to the chief executives of companies including Just Eat, British Airways, and Royal Mail urging them to pay the so-called real living wage.
The letter, published today, outlines a growing business case for the living wage, arguing that it can boost productivity, reduce staff turnover and improve employee relations.
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Signatories included Legal and General Investment Management, Hermes EOS, BMO Global Asset Management, and Nest. Together they manage or advise on nearly £2 trillion.
Paying the real living wage – which takes into account living costs – also reduces the risk of disruption from industrial action such as the planned Royal Mail strikes, the investors argued.
The letters, organised by campaign group Share Action, were sent to firms that rely on working contracts that do not include a living wage and therefore “present risks to long-term sustainability”.
JD Sports, British Land, Rentokil and Smurfit Kappa were among the FTSE 100 giants facing the demands.
Pauline Lecoursonnois, an engagement professional at Hermes EOS, said: “The case is clear: a workforce that is fairly paid, well valued and respected will perform better than one that isn’t and therefore we are asking UK companies to consider paying the living wage as a key indicator of a responsible and sustainable business.”
Figures published earlier this month by KPMG revealed that the proportion of UK jobs paying below the living wage has fallen to a seven-year low. Nearly 6,000 businesses now pay the wage, including 38 of the FTSE 100.
However, KPMG’s report said there is “still a long way to go” for part-time workers, while there was still a large gap between men and women.
The latest rates, announced by the Living Wage Foundation, are £10.75 per hour in London, and £9.30 throughout the rest of the UK.
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A Royal Mail spokesperson said: “Our hourly pay rate for postmen and women is around 40 per cent above the national living wage and around 30 per cent above the voluntary living wage set by the Living Wage Foundation.”
British Airways said its employees earned “well above” the national living wage or national minimum wage. Just Eat said it paid the living wage for all UK employees and was in regular contact with the Living Wage Foundation.