Our Chief Executive, Rosie Ferguson, reflects on why pay matters and what you should demand of your favourite bars and restaurants (second favourite after the House of course!).
Think back to the last time you were out for dinner or drinks. How did you know if the person who served you could afford to pay their bills? Or had a guaranteed income each month that they can rely on?
In the UK, the National Living Wage is £8.91 for adults aged over 23, but this wage is calculated on what is affordable for businesses, not individuals and their families. The Real Living Wage is paid by over 9,000 UK businesses who believe their staff deserve a wage which meet daily needs – like the weekly shop, or an unexpected to the dentist. At £9.90 across the UK and £11.05 in London, the real Living Wage is based on what people actually need to get by. For a Londoner working 40 hours a week, that is a guaranteed annual salary of £22,984 compared to £18,532 on statutory National Living Wage. That’s an extra £250 a month you can rely on.
For those of you who don’t know us, House of St Barnabas is a private members club working to break the cycle of homelessness; both by supporting individuals into lasting good work and a secure home through our employment academy; and by convening and showcasing what good employment can look like in supporting individuals from more precarious backgrounds to thrive.
For us, and the people with a lived experience of homelessness that we work with, good work means a fair living wage, stability of contracted hours, opportunities for progression and a focus on the whole person in terms of their wellbeing and work/life balance. It doesn’t sound like a lot in some ways, but we are continuously shocked by how many employers do not provide these basics. It is impossible for individuals to build a secure stable life without these things in place.
The old – and outdated – model of topping up pay with service charge or tips, allows businesses to load the risk of business volatility onto their staff, rather than their shareholders. When footfall and spend are unpredictable, as they have been over the last two years, it is the lowest paid who take the burden, rather than the customer or shareholders. This makes life impossible to plan, guarantee rental payments or apply for a loan.
As a hospitality employer ourselves, we know that running a viable business and being the best employer can sometimes be in tension. We are committed to paying the Real Living Wage as the basic rate of pay, but our fixed costs are higher regardless of how the business is performing, and we still face the same challenges of recruitment and retention as the rest of the sector. We must be honest that there is no magic commercial return on paying London Living Wage – and that our prices must reflect this.
We convened some hospitality businesses to discuss these challenges, talking about how to prioritise a guaranteed Living Wage within business models that are under pressure. As this discussion progressed, it became clear that rather than a commercial question, paying Living Wage is absolutely a moral issue about who bears the brunt of your business volatility and what standard of living you can accept for your employees.
As responsible consumers, we understand now that if we want locally sourced food that has less environmental impact or clothing that doesn’t perpetuate the damage of fast fashion on the communities that produce it, then we must pay more. Yet many of us are still happy to eat and drink in establishments that don’t guarantee their staff a decent standard of living.
There will only be an urgent commercial imperative for hospitality businesses to change practice when customers begin to demand higher standards. We need a real shift in how we as consumers choose where we eat and drink. The more we ask that our favourite bars and restaurants guarantee a Living Wage as basic, the more pressure there will be on businesses to shift who carries the risk of their business away from the lowest paid.
So, when you are choosing where to eat and drink this weekend, pick somewhere that pays the Real Living Wage, rather than topping up hourly pay with service charge. In the current climate we are in, the majority of businesses you eat at will likely say no, but it is critical for us to push this agenda onwards – and you will be making a change with every conversation you have.
Interested in who is committed to good work? You can see hospitality employers who are Living Wage accredited – HERE.