Living wage... friend or foe?

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The budget yesterday announced that the national minimum wage of £6.50ph for over 21s will be replaced by a ‘living wage’ for the over 25s.

This will be set at £7.20 from April 2016 and will rise to £9.00 by 2020. Along with the increase in the tax free personal allowance to £11,000 in 2016/17 and £12,500 by 2020, the Treasury estimate 2.7m low wage workers will receive a pay rise next spring.

But will they really? The Office of Budget Responsibility predicts that some 60,000 people are set to lose their jobs as a result of the changes.

In the unqualified care sector most workers can be described as low paid and the increase will put pressure on local authorities in particular, who are already under pressure to cut staffing costs.

A large number of these workers are agency staff who cover shifts when permanent staff are not available, and these are the people who will be first in line for reduced hours when budgets are under pressure. Rather than an increase in income for the valuable workers this could lead to a decrease in the money they are taking home each week. Crucially, less staff would mean a decline in standards of the care provided to the vulnerable residential centres, hospitals and day centres, as well as in the community.

Employers need to put the needs of the service before the need to cut costs to ensure safeguarding needs are met. If this can be achieved then the rise in income for some of our most crucial and lowest paid workers will only be a good thing.

 

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