Abstract
The Real Living Wage by Edmund Heery, Deborah Hann, and David Nash is an invaluable book for anyone wanting to know more about the implementation, operation, and effects of the Real Living Wage (RLW) in the United Kingdom. The United Kingdom has had a statutory National Minimum wage since 1999; in 2016, the title of that statutory minimum for workers over age 25 was renamed the Living Wage. But the RLW is a non-statutory wage rate calculated by the Living Wage Foundation, which also accredits employers that can demonstrate they pay both directly employed and contracted workers the current rate. Unlike the statutory minima, RLW is calculated by reference to the cost of living and differentiates between London, where the cost of living is generally higher, and the rest of the country.
The book focuses on the work of the Living Wage Foundation and the effects of the RLW on employers, unions, and public authorities. It draws on more than a decade of research and uses multiple methods to explore the complexity and dynamics of the implementation and effects of this impressive feat of civil regulation. The concept of civil regulation is used to frame the opening chapter. After exploring the deep-seated problem of low pay in the UK labor market, the authors review literature around what we know about civil regulation. To date, literature has mainly focused on the work of international nongovernmental organizations (NGOs) that seek to regulate corporate activity to promote sustainable business practices and adherence to labor standards. This approach is quite different from the work of the Living Wage Foundation, which is both UK-focused and specifically seeks to regulate pay levels, although the authors also note recent initiatives seeking to regulate scheduled hours of work. Nonetheless, the authors make a convincing case that civil regulation literature is a valuable lens through which to understand the RLW and its effects. They flag that this literature allows them to explore the content of this form of regulation, the methods used to promote particular standards, the responses to private regulation, how civil regulation interacts with the public sphere, and the effectiveness in promoting good labor standards.
This understanding of the RLW as a form of private, civil regulation is an invaluable addition to our understanding of the regulation of labor standards more generally. The United Kingdom has experienced a notable decline in the institutions of the collective regulation of work, especially through trade unions and collective bargaining, so exploring the opportunities beyond statutory regulation and collective bargaining is a crucial contribution to industrial relations literature and beyond.
After introducing the theoretical framing, the book is then structured around describing the RLW, its origins, how it is calculated, and the context in which it emerged. Five substantive chapters look, respectively, at the campaign for the RLW, employers, trade unions, public authorities, and the impacts of the RLW. The book ends by returning to a broad reflection on the overall significance of the RLW in the United Kingdom. Each chapter presents detailed qualitative and quantitative data that build a rounded picture of multiple aspects of this new form of wage regulation.
The overall message of the book is remarkably optimistic, especially in the context of the attack on collective regulation of work and employment in the United Kingdom over the past 40-plus years. It is clear that the broad effects of the RLW have been mainly positive in most of the organizations that have implemented it, with very few negative effects being reported despite the authors actively asking about these. The authors point to multiple reasons for this broadly positive assessment. Many employers seek RLW accreditation only after they are confident it will be secured, meaning the immediate effects on the pay of individual workers can be quite small, if any. Nonetheless, workers in a small percentage of employers do benefit from significant uplift to their pay. And accreditation means that employers must continue to pay the increased levels in future years to retain their accreditation. Relatively little evidence suggests that employers make trade-offs to pay for pay uplifts, and where they do, they are negotiated primarily with trade unions. Crucially, the RLW also applies to contracted workers and can therefore be used to exert influence in the labor market more widely.
A central story of the data is the importance of local politics in the promotion of the RLW. The devolved administrations of the Welsh and Scottish Governments have promoted the RLW as a core part of their efforts to improve labor standards. In Scotland, for example, employers who are bidding for contracts in the public sector have a responsibility to demonstrate that they pay the RLW. Similarly, local authorities in some cities have developed specific policies to promote the RLW in their areas. This place-based focus is helpful, although it comes and goes throughout the book, perhaps inevitably given the UK-level focus. There is certainly more to be written by these authors and others about how the specificities of sub-national governments, politics, and labor markets play out to take some employers along paths that differ from the dominant UK neoliberal approach to labor regulation.
A final reflection is that while the book does engage with questions of enforcement, more detail would be welcome. Much of the industrial relations literature focusing on civil regulation identifies weaknesses with enforcement, and the RLW is no different. But there is scope here for either these authors or others to develop a more robust conceptualization of why particular outcomes are observed.
Overall, The Real Living Wage serves as an important description and analysis of a relatively rare mechanism for labor regulation, from which industrial relations scholars can learn a great deal in the United Kingdom and beyond.