London living wage campaigner Deborah Littman says paying a living wage will require a leap in thinking to accompany a monetary leap from the $13.50 an hour minimum wage to the proposed $18.40.

She says the aim is never to have the living wage legislated for, but for it to be a voluntary, grassroots campaign. The mindset shift she is talking about is getting employers around to thinking that paying $18.40 is not a burden because it costs more, but a benefit because it results in improved productivity, reduced staff turnover and absenteeism.

"Over and over again businesses tell us when they introduce the living wage they find their business does better - their staff turnover goes down and the cost of recruitment is lower."

The living wage campaign in Britain has business allies including KPMG, PricewaterhouseCoopers, Barclays Bank and HSBC.


Ms Littman says low-pay comes at a cost to society as a whole.

"You have your low-paid cleaner, she has children - because of the low pay she receives she can't feed them adequately; those kids go to school without breakfast; they have less of an attention span, they get sick more often," she says.

"There's a very close relationship between income and educational outcomes, but there's another hidden cost - people are doing two or three jobs and they're not around for their kids and they get ill."

Ms Littman is in Auckland today talking about the successes of the London campaign. She was vice-chairwoman of London Citizens and worked for 12 years on the living wage campaign.

The campaign was largely non-political when it began in 2001. After lobbying big business, the coalition group London Citizens then approached local and central government.

"Once we'd won some living wage victories in the health sector we then won major victories in the building and cleaning industry, in the big financial sector, Canary Wharf in the city. Big banks and financial institutions then applied it to their cleaners.

"Once we had done that we then moved into the political level by asking all of the mayoral candidates in 2004 if they would commit to introducing an official living wage. All of them said yes."

London mayor Boris Johnson has been outspoken in his support of a living wage which is now £8.55 ($15.62) an hour.


Ms Littman says the NZ figure is higher because of substantial tax credits included in the London calculation.