Following months of heated debates and deliberations, George Osborne had announced that the new, mandatory national living wage would be enforced as from April 2016 (Personnel Today,2016). The living wage law requires all employers to pay a statutory wage of £7.20 an hour to all workers aged 25 years or above (HM Government). According to Bennett (2014) and Clary (2009), the living wage is the level of income that an individual must earn to cover the basic costs of living and to maintain a safe and decent standard of living. Furthermore, Stabile (2008) believes that employees should earn a remuneration that “is defined by the standards of the community in which they live and work”. Nevertheless, ever since the implementation of this current living
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Sidney and Beatrice Webb reveal that living wages prevent employees from “exploiting and exhausting their workforce”, eventually leading to “industrial efficiency” (cited in The Ethics of living wage,2016 :438). Secondly, Ryan (1912) argues that living wages “favour competent employers”, who operate at lower costs and are more productively efficient. Paying a fairer value to the workers, will thus encourage producers to use their scarce resources more efficiently (Stabile,2008). Counter arguments against the externality viewpoint show that the present living wage rate has caused people to become more dependent of the “supplementary welfare payments” provided by the State (Waltman,2004). This implies that the living wage legislation is liable to reforms if the “government policies on welfare change” and consequently, the “bargaining power of labour” will be significantly reduced (cited in The Ethics of living wage,2016:
Sidney and Beatrice Webb reveal that living wages prevent employees from “exploiting and exhausting their workforce”, eventually leading to “industrial efficiency” (cited in The Ethics of living wage,2016 :438). Secondly, Ryan (1912) argues that living wages “favour competent employers”, who operate at lower costs and are more productively efficient. Paying a fairer value to the workers, will thus encourage producers to use their scarce resources more efficiently (Stabile,2008). Counter arguments against the externality viewpoint show that the present living wage rate has caused people to become more dependent of the “supplementary welfare payments” provided by the State (Waltman,2004). This implies that the living wage legislation is liable to reforms if the “government policies on welfare change” and consequently, the “bargaining power of labour” will be significantly reduced (cited in The Ethics of living wage,2016: