Speak up over poverty pay

first_imgMany are struggling to survive on the minimum wage, yet HR is silent on thelevel at which it should be set”The level of exploitation was really very concerning. When we saw whatthey were paid and what they actually did, it was heartbreaking. We saw workingpractices that we thought we had lost in the last century.” So said Stephanie Monk, HR director of Granada Group, who sat on the Low PayCommission (LPC) until last year (after picking up a CBE). She probably doesn’tmove in sweatshop circles. This is the only public acknowledgement I can find from anyone connectedwith the HR world during the last seven years on the social and moral aspect ofpoverty pay in Britain. There are of course great forests of the obvious stuff employers have beencoming out with for two centuries on the subject of wage protection. “It [the National Minimum Wage] could be the last straw for employerswho are already struggling to survive on low margins,” fretted JohnStevens, director of professional policy at the then IPD in August 1996,calling for “further consideration” of a rate between £3.00 and £3.50an hour (it was introduced at £3.60 in April 1999). The HR divide This is surprising. I know HR is supposed to have strategically aligned itsconscience out of existence, but nevertheless, I suspect many in the professionfeel more divided about low pay than their stereotype allows. Like the two halves of a John Gray book, a bit of them will be Venus, ableto see the world from someone else’s perspective; the other is martial Mars,who knows it’s a jungle out there. But I shall just have to go on suspecting,because only Mars is allowed a voice. Except that is not quite true. The CIPD has decided to hold itself alooffrom what it regards as the seedy, self-interested scraps between unions andbusiness organisations on what the minimum wage rate should be. Its view is that the LPC is doing a good job and should be left to get onwith it. That is why the CIPD has said nothing since that far-sighted statementof 1996. No voice, then. Here is a curious intellectual position: the presence of a state-backedarbiter makes opinion redundant – as if viewpoints function only where thestate doesn’t. Thankfully, the institute is not consistent; it hasn’t abandonedopinions on diversity because of the Equal Opportunities Commission, nor onskills because of the Learning and Skills Council. Which makes its stance onlow pay all the more peculiar. Righteous passivity In a debate characterised by business indifference to injustice and unionindifference to the economic environment, the profession charged with theman-agement of people has chosen the path of righteous passivity. It’s a good job the Government has not lost hope. Monk has been replaced onthe LPC by Angie Risley, HR director of the Whitbread Group – a company thatprior to 1997 was militantly hostile to the minimum wage, but, like others, hassince mellowed. What should be the nature of a distinctive HR contribution on the minimumwage? It’s not easy. Few would want to identify with traditional businessparsimony when the doom-laden predictions were so wrong. The success of theNational Minimum Wage is a strong argument for increasing it gradually. The new rate from this October of £4.50 is still sub-survivable in the SouthEast, unless you do two or three jobs. Moreover, many must sense there-distributionist tilt the LPC is taking. “All the signs are… that the minimum wage can now be increased as apercentage of average earnings – benefiting more workers – without producingdamaging economic effects,” writes chairman Adair Turner, in the LPC’sfourth report. It would be tempting to merely make technical points: the case for regionalminimum wages, for instance, the lack of enforcement (just 96 people do thistask) or the importance of accurate data (the Office for National Statisticsfluffed estimates of the low paid, effectively short-changing millions). Yetthat will not do: the relative position of the low paid is a primary employmentrelations issue. What’s the solution? There will always be a tension between affordability and justice, yet oneclue to a possible stance might be to ask a new question: what settlement onlow pay is most desirable for good people management? The question surely implies support for a relevant, rising pay floor and arepudiation of race-to-the-bottom labour economics. In fact, if the Venus in them was un-gagged for a minute, most HRprofessionals would acknowledge that social justice issues at work are thegreatest de-motivators, the greatest dis-incentivisers, the greatest bars ondiscretionary effort, and one of the greatest thwarters of their endeavours(after CEOs). Paying as many as a third of the British workforce less than the EU decencythreshold of £7.32 risks rendering discussion of high-performance workpractices pie-in-the-sky. One or two old-fashioned souls may even wistfully reflectthat the Labour Party’s original plan for a rate set at half male medianearnings – £5.38 – is not so far from the demands of social responsibility,fairness, and high quality HRM. HR professionals have an admirable desire to be practical. ‘People are ourgreatest asset’, is not practical. Debate about the minimum those ‘assets’ should expect, would be verypractical indeed. Speak up. Comments are closed. 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