Won’t companies simply lay off workers if they have to pay higher wages?
• Similar arguments were made when the National Minimum Wage was introduced and there was not an associated round of lay-offs. • Experience from employers that have switched to paying a living wage suggests that fair pay can increase productivity sufficiently to avoid any justification for sacking workers. With a lower levels of sickness and absenteeism as well as higher morale and productivity firms like KPMG were able to make significant gains from paying a living wage. The University of London Union was able to switch its cleaning staff contract to a firm that agreed to pay a living wage without increasing the cost to student union of the cleaning contract.
