Social enterprises lead the way in fair wages

Web callander youth project

The award winning Callander Youth Project operates two social enterprises and is an accredited living wage employer

Three quarters of UK social enterprise pay the living wage

Paul Cardwell's photo

12th February 2016 by Paul Cardwell 0 Comments

Three quarters of social enterprises pay the living wage, it has been revealed.

Social Enterprise UK has found that 74% pay their employees the £8.25 per hour rate.

The findings suggest social enterprises are leading the way when it comes to pay with a recent Office for National Statistics report showing that approximately six million employees in the UK are paid less.

Just one in five social enterprises surveyed said they do not pay the living wage. The main reason cited being the need to compete with ordinary businesses in open markets.

The public sector has an important role to play to help foster an enabling environment by specifying in their contracts that workforces are paid the living wage

Last year, the Scottish Government introduced new rules that mean firms bidding for public sector contracts north of the border will be expected to pay employees the living wage.

Social Enterprise UK is now calling on the rest of the UK to implement the policy.

“In an economic recovery dominated by low-pay and with ever rising inequality it is heartening to see that the vast majority of social enterprises see paying the living wage as essential to their mission as responsible businesses,” chief executive, Peter Holbrook CBE said.

“Many social enterprises are operating in sectors where wages are notoriously low and competition is fierce – and paying the living wage may well disadvantage them or leave them unable to compete.

“The public sector has an important role to play to help foster an enabling environment by specifying in their contracts that workforces are paid the living wage.”

The Social Enterprise UK report also found that social enterprises are thriving, outperforming their mainstream small and medium sized enterprise counterparts in nearly every area of business: turnover growth, workforce growth, job creation, innovation, business optimism and start-up rates.

Meanwhile, the average pay ratio between social enterprise chief executive pay and the lowest paid is just 3.6:1 while for FTSE 100 companies, it stands at 150:1.

Sarah Vero, director of the Living Wage Foundation, added: “We are delighted to know that around three quarters of the social enterprises surveyed are paying the voluntary living wage based on the real cost of living. We would encourage those businesses that are paying to accredit as living wage employers.

“Accreditation as a living wage employer sees businesses extend the living wage to all staff, this includes those working on contracts for an organisation as well as directly employed staff. Often those roles that are sub-contracted, such as cleaning, catering and security, are those most likely to be paid at a very low rate.

“Accreditation ensures better pay for all.”