Fair Pay Network

Yes, we\’ve got another bunch of do-gooders around, the Fair Pay Network.

Evidence suggests that fair pay policies increase worker efficiency within organisations that adopt them. This is primarily felt through the contribution which fair pay levels have in combating the recruitment and retention problems which plague employers of low-paid workers.

This is, of course, true. But they\’ve missed the important part of it. It is only true for the companies that adopt it if most other companies do not adopt it.

Companies are in competition with each other for the best workers: workers are in competition with all other workers for the best available jobs. If you raise the pay then as the employer you\’ll be beating your competition for those best workers: if as a worker you\’re getting better pay than others then you\’ll work harder and better to keep that better pay. Plus, of course, you\’re less likely to switch jobs (staff recruitment is a very high part of the total costs in some sectors).

All excellent stuff of course. But if everyone now starts paying "Fair Wages" (what they mean is the Living Wage) then these benefits for the company disappear, for neither of the two driving forces remain extant.

So, err, by campaigning for all businesses to pay "Fair Wages", the organisation is campaigning to eradicate the very reason that fair wages are beneficial to those businesses which pay them.


2 thoughts on “Fair Pay Network”

  1. I guess some if not most of those companies paying the “Fair Wages” do it for the reasons you outline above – to get better staff. If all their competitors are paying these wages then to continue to recruit and keep better staff (presuming this gives them a competitive advantage) they will need to increase their pay.
    So wages continue to rise.

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