"• Polly Toynbee is right to ask "why should taxpayers subsidise Scrooge employers?" As a basic minimum employers should be paying their staff enough to live on - it is the right thing to do. For many it also makes business sense. Recent research by Queen Mary, University of London, shows that when a living wage is paid the reputational benefits help to win new clients; staff leaving rates fall by 25%; and employees are more loyal and positive.
This is not to deny there are wage costs attached. For organisations employing large numbers of low-paid staff, the worries about costs need to be listened to and managed. Research by the Resolution Foundation shows that for listed firms in construction, software and computing, banking and food production, average wage bill increases from implementing a living wage are small - around 1% or less. Why are we subsidising these firms to pay poverty wages?
Bharat Mehta
Chief executive, Trust for London"
http://www.guardian.co.uk/society/2012/nov/11/politics-of-poverty-level-pay