With over 70,000 social enterprises, employing nearly a million people and contributing £24 billion to the UK, pay is an important factor in the running of an enterprise that benefits the community. In the current economy, which seems to be synonymous with low pay and rising inequality, it is promising to see that social enterprises are thriving in nearly every area in comparison to their SME counterparts. 74% of social enterprises are paying the living wage according to a recent survey by Social Enterprise UK.
The living wage stands £9.40 in London and £8.25 for the rest of the UK. Among the respondents of the survey who pay the living wage, 91% said it was the responsible thing to do as social enterprise’s are characterised by responsible businesses actions. 87% said social enterprises are good businesses and should be pioneers in adopting the living wage, and nearly two thirds of those surveyed (68%) believe all social enterprises should be paying the living wage.
The survey also highlighted that of the 20% of social enterprises that do not pay the living wage the main reasons mentioned were:
- 71% argued that paying the living wage would affect their ability to compete with ordinary businesses in open markets.
- 52% said they were unable to pay the living wage due to size or because they were just starting up.
Peter Holbrook CBE, Chief Executive of Social Enterprise UK said:
“Of course there are legitimate concerns to paying the Living Wage and adopting it is not the silver bullet which will break down structural imbalances in the economy. Many social enterprises are operating in sectors where wages are notoriously low and competition is fierce – and paying the Living Wage may well disadvantage them or leave them unable to compete.
“The public sector has an important role to play to help foster an enabling environment by specifying in their contracts that workforces are paid the Living Wage. Camden Council’s Carers’ Services is a great example of where this already happening.”
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