Watch/Listen

60 seconds on the impact of the living wage

Schroders ESG analyst Elly Irving discusses the financial and social impact of the living wage.

29/05/2015

Elly Irving

ESG analyst

What is a living wage?

A living wage is a wage that allows the earner to afford housing, food, healthcare, clothing and the basic necessities.

The living wage is higher than the minimum wage and within the UK 21% of the workforce earns below the living wage.

We looked at the business case for adopting the living wage. We investigated the cost of increased salaries versus the benefits.

Benefits of the living wage help offset costs

The companies that have already paying the living wage have seen benefits such as reduced employee turnover and better customer service.

We also looked at different sectors and where the exposure is greatest to living wage risk. We saw that in the retail sector there is the highest number of sub living wage workers.

Our in-depth analysis found that the potential costs could be offset by a third through the potential benefits of the living wage.

This is something that we continue to monitor and as active owners we are engaging with companies on this topic.

Important information: The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This article is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. Issued by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA, which is authorised and regulated by the Financial Conduct Authority. For your security, communications may be taped or monitored.