In Place of Pay Inequality: By Benjamin Irvine
This study was written by Benjamin Irvine for Steady State Manchester and Equality North-West. It investigates the pay policies of Local Authorities in the North West. The objectives are to scrutinise the basis of Local Authorities’ pay policies and to encourage them to implement stronger policies to reduce pay inequality within their workforce and within that of their suppliers.
The full title of the study is ‘In Place of Pay Inequality: How Local Authority Pay Policies can help make Greater Manchester more equal and sustainable, and why it matters’ By Benjamin Irvine, and can be found on the Steady State Manchester website:
Steady State Manchester is an organisation working to get ideas of the Steady State Economy and Society understood and implemented by decision-makers and the wider public within Greater Manchester. We aim to encourage a groundswell and coalition for change through our general awareness-raising and education. We also support and encourage development of projects that demonstrate the alternative framework we espouse. Our three intersecting areas of concern are the ecological, the social and the economic.
Equality North West is a regional campaign group affiliated to the Equality Trust. It promotes more equal societies on the basis of research evidence that they perform outstandingly better on measures of social cohesion, human development and reported well-being and happiness.
With infinite economic growth incompatible with environmental limits and global justice, a reduction in income inequality is essential to enhance real well-being and bring us closer to living within a safe and just space for humanity.
Chapter 2: Tackling Income Inequality, Local Government Pay Policies
- 2.1: Levels of Pay and Pay Dispersion in GM Local Authorities
- 2.2: Policies which Demonstrate a Commitment to Pay Fairness
- Living Wage Policies
- Pay Multiples
- Pay Policies for Contracts
Chapter 3: Catalysing Equitable Pay in the Private Sector
- Case 1: Salford Towards a Living Wage City
- Case 2: Oldham, Procuring Social Value
- Example of Best Practice: London Borough of Islington
- Appendix 1: Local Authority Responses to FOI Requests
- Appendix 2: Pay Policy Statements
Local Authorities in Greater Manchester have displayed leadership on issues of inequality by implementing Living Wage Policies for their lowest paid employees. As of June 2013, 82 of 400 Councils in England and Wales and all 32 Scottish Councils pay the Living Wage Foundation rate or a locally determined living wage to their employees. [Source: ’82 Councils Pay Living Wage’, http://www.gmb.org.uk/newsroom/councils-pay-living-wage.]
We argue that despite cuts to local government budgets, Local Authorities still have the power to effect substantial positive change in their local economies through reducing income inequality.
With an acute lack of adequate action from national government to reduce income inequality it is even more necessary to adopt bold and creative local government spending policies, which can safeguard and improve local prosperity and well-being. Such an approach can produce double or even triple dividends in social value creation, above and beyond the value of the good directly procured.
In this way the social, environmental and local economic value created by reducing inequalities would outweigh any marginal increases in employment and procurement costs. We argue that Local Authorities should see themselves as ‘local economic activists’ by setting internal pay multiples with employees, and in line with their responsibilities and aspirations for sustainable development and local economic well-being.
We also urge them to harness their purchasing power to raise low incomes and place downward pressure on pay multiples in private sector procurement partners, through broadening Living Wage policies to cover employees of external contractors.
Reducing pay inequality and raising lower incomes not only alleviates hardship, it has the potential to invigorate more virtuous local economies through increased local re-spend and create jobs, whilst bringing us closer to living well within ecological limits.