National Living Wage Week: How can big companies, earning big profits, keep paying such little wages?

This isn't about paying people to subsidise extravagant lifestyles. Far from it

UK Sale: £1.2bn... UK Tax: £0 (Rex Features)

Ask anyone who works in the service industry about their job and the majority will tell you the work is hard and satisfaction is low. Well this week is National Living Wage Week; so, for a short period debate is raised over the millions of willing people who hold jobs, yet still struggle on what little money they earn. Welcome to 21st Century Britain.

The large group of people who are inevitably inflicted with this head-in-vice lifestyle is the people who work in the service industry. In almost every bar you drink in, every coffee shop, restaurant, clothes store, hairdressers, and garage there probably exists a person struggling financially, worrying about basic things such as paying rent, utility bills, and eating well.

This week Labour announced plans to encourage companies to provide staff with a living wage, by offering £1,000 tax breaks per worker they help. National Minimum Wage is £6.31 per hour, which increased a mere 12p from 2012. Why then, is the recommended National Living Wage in the UK set at £7.65, while the advised rate for London is £8.80? As the minimum wage continues its sluggish year-on-year ascent and energy costs continue to soar each year – it is depressingly out of sync with UK living costs. The Joseph Rowntree Foundation reported that the cost of living has risen 25 per cent over the past five years, while minimum wage has been raised only 58p during this period.

I work in a bar part-time, often till past 3 am, and there’s nothing more demoralising than a punter pulling a First World Sulk on a Friday evening after hearing the dreadful news that the Pinot Grigio they want is out of stock. It's no secret that people working in the service industry have to put up with a lot of rudeness, and can get pretty fed up with the petty gripes of customers – the pay doesn't exactly make everything worthwhile.

It was reported earlier this year that in 15 years of trading in Britain, global tax-avoiding coffee-chain Starbucks paid a mere £8.6m in corporation tax on sales of £3bn. So while Starbucks gets away with tax avoidance its often over-qualified staff are earning wages below a basic living standard. Big companies should be held accountable for not paying workers the rate of a living wage – and forced to do so if they earn over certain thresholds.

The Deputy Director of living wage campaigners Citizens UK told me: “It's a decision about the kind of company you want to be. Over 430 employers have chosen to go Living Wage because they're taking responsibility for the well-being of their staff.” 

Businessman Steve Cox, Owner of Faucet Inn, a group of 20 London-based bars and pubs, has recently moved his 300 staff onto living wages, which is highly commendable and a victory for the workers in the service industry.

“It wasn’t a very difficult sell, us putting their wages up, it was the moral thing to do. I think it’s been transformational for some of the people in terms of living in London, the morale is so much higher, and this has always been a transient kind of business [for staff], but now everyone has the ability to earn a wage that can make ends meet” says Cox.

This debate isn’t about paying people a wage to afford extravagant lifestyles; this is about paying people enough money to live without fear of bailiffs knocking at the door. For a developed country in the 21st century, such a situation is abusive and unacceptable.