Act now to secure a Living Wage

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Published: 10 June, 2010

Inadequacy of national minimum wage legislation combined with weak union organisation among low-paid workers perpetuates poverty pay, argues George Binette (above)

A LITTLE more than 20 years ago there was no such firm as MITIE (the acronym stands for Management Incentive Through Investment Equity). 

By 2009 the company employed more than 50,000 people across Britain, with others working on contracts in Ireland and the Netherlands. 

In the last financial year its turnover surpassed £1.5billion, while for the six months between April and October 2009 its revenues exceeded £801million; its estimated profits soared by 12.5 per cent and dividends per share rose from 3.3 to 3.7 pence. All this came in the teeth of one of the most severe recessions witnessed since the Second World War. 

So how were these remarkable results achieved? Through a combination of strategic takeovers, the outsourcing of public sector contracts; and, frankly, the exploitation of cheap labour.  

In September 2006 MITIE officially took over as the cleaning contractor for virtually all of Camden’s workplaces including the bulk of its community schools after five years of the improbably named KGB. 

Some 250 people work on the Camden MITIE contract and Unison believes that the vast majority now earn substantially less than the London Living Wage, currently set at £7.85 an hour. 

In the context of Europe’s most expensive city, this means an existence where two, three and even four jobs is the norm and where the Underground network is a barely affordable luxury.

According to MITIE’s own figures, supplied to a council scrutiny panel in late 2008, a high proportion are on the national minimum wage and of these 96 per cent were from Black and Minority Ethnic communities. Many of them are migrant workers from Latin America, Africa and eastern Europe.

Some would seize on that fact to buttress claims that migration cuts the wages of Britain’s less skilled. The reality is that the woeful inadequacy of national minimum wage legislation combined with weak or absent union organisation, among low-paid workers perpetuates poverty pay. 

Even where a majority of privatised employees are Unison members, as in the case of parking enforcer NSL, the company adamantly refuses to recognise and negotiate with the union.

Camden Unison welcomes the newly-elected Labour council’s pledge to introduce the London Living Wage, albeit with caution. 

The unfortunate reality is that the award of the cleaning contract to MITIE, as with numerous other outsourcings of ancillary manual staff, took place while previous Labour administrations pursued “Best Value”. 

As elsewhere in London, Camden’s monitoring of outsourced contracts has often been poor, with a strong tendency towards hand-washing when it comes to workforce pay and conditions.

Research examining the experience of several US cities, which have adopted robust living wage laws for public contracts, refutes the claim that such measures cost jobs. 

In the words of Massachusetts-based academic, Mark Brewin: “… living wage laws are only one of many factors influencing the cost of city services, and often not the most important one! To date there has been no evidence of laws on the books leading to systematic job losses.” (www.peri.umass.edu/ 339/).

The realisation of easy profits, with taxpayers’ unwitting support, from public sector contracts for companies such as MITIE, Caterlink and NSL among others has gone on far too long. 

If such operators are going to continue dealing with the public sector then they must be prepared to take a hit on their profit margins. If they won’t pay then the time has come for such work to return in-house.

Along with other Unison branch officers, I am keen to meet soon the recently elected Labour administration in the hope of making swift progress towards the following goals:

• an explicit timetable for implementation of the Living Wage with tangible results during the course of this financial year;

• a clear commitment to stopping private contractors from using the implementation of the Living Wage as a pretext for cutting jobs and/or hours – the costs should be borne by a squeeze on their profits;

•the Living Wage should be inflation-proofed (most probably on the basis of the retail price index) and upgraded annually – in short, it should soon rise from the current £7.60 to £8;

• the introduction of the Living Wage should be seen as the start and not the end point of a dramatic improvement in labour standards on outsourced contracts;

• the full council should adopt a resolution in 2010 declaring the aim for all of Camden to become a Living Wage borough. 

This would be particularly useful in the context of an ongoing battle at a major local employer, University College London, where in contrast to other Bloomsbury colleges, Provost Malcolm Grant, whose total remuneration exceeds £400,000 a year, adamantly refuses to implement the Living Wage on UCL’s outsourced contracts.

• George Binette is Camden Unison branch Secretary