Wider Payment of the Living Wage in Scotland – Issues for Consideration

Annex C: Living Wage Information Sheet

Introduction to the Living Wage

The Living Wage an independently set rate of pay is calculated to represent the minimum pay rate required for a worker to meaningfully participate in society, rather than merely provide the minimum income necessary for basic necessities. It is calculated to include housing and utilities, food, and health care as well as transport and recreation.

• The Living Wage is currently set at £7.65 per hour, compared to the main National Minimum Wage rate of £6.31 per hour (for those aged 21 and over)^[6]
  
• Unlike the National Minimum Wage, the Living Wage is not differentiated by age and is updated annually to reflect changing price levels and living standards, nor is the Living Wage a rate of pay set by national legislation.

• A wide range of employers across the UK have introduced this higher rate of pay, including over 300 accredited by the Living Wage Foundation.
• The Scottish Government has committed as part of its pay policy to paying the Living Wage, and it supports the Living Wage campaign as one of the measures to address poverty in Scotland. Since 2011, it is Scottish Government policy that directly-employed Scottish Government and NHS employees are paid the Living Wage.

The Living Wage is thought to offer both economic and social benefits, including:

• Enhanced staff motivation and quality of work
• Improved staff recruitment and retention
• Reductions in in-work poverty and income equality

Scottish Government: Consultation on Living Wage through Procurement

There have been calls for the Scottish Government to support the use of public procurement processes to promote the payment of the Living Wage by suppliers to the public sector in Scotland. The Scottish Government is keen to seek stakeholders' views and fully understand the potential impacts of using procurement activity as a mechanism for delivering the Living Wage.