A local living wage will boost wages, increase productivity and return cash to the taxpayer. What’s not to like?

Campaigners demand the living wage in London in 2014. Image: Getty.

It’s that time of year again: summer is drawing to a close and the political party conference season is nearly upon us. Media attention over the coming weeks will focus on the politicians, the grand oratory and the low politics.

But behind the scenes and unnoticed will be an army of workers. Serving food, pouring drinks and cleaning hotel rooms. Most will be paid below the real living wage.

It isn’t just the individuals that are too often undervalued, but also the collective importance of low-paid jobs to local economies. In the Liverpool City Region, host to Labour’s conference, one in four jobs are paid below the living wage. Yet there is a tendency for economic regeneration plans for our towns and cities to fixate on the ‘creative class’, ‘innovation hubs’ or iconic infrastructure projects.  

By ignoring such a large proportion of the workforce, it is little wonder that our cities can’t exit the so-called ‘low-skills equilibrium’, where firms staffed by poorly trained managers and workers compete on price or costs rather than quality. It’s no surprise, either, that UK cities compare woefully with European counterparts on productivity.

Exiting the low road and tackling low pay will not be easy. Even with the introduction of the National Minimum Wage, a fifth of workers are still low paid. There are reasons to be optimistic – not least the emerging consensus around the idea of inclusive growth. But the words “inclusive growth” easily fall from the tongue. The rhetoric urgently needs to be backed up with action.

Thankfully, some of the newly elected mayors are supporting the Living Wage Campaign. The stats show what a huge difference the living wage can make. The average low-paid worker in the West Midlands, Glasgow, Greater Manchester and Cardiff would see an annual pay rise of over £1,000 if their pay was lifted to the Living Wage. Just as compelling are the testimonials. Only the cold-hearted could fail to be moved by stories about the struggles of daily life on low pay – with no spare money to enjoy the very benefits that cities exist to offer.

Of course something should be done, some will argue – but how will it be paid for and what about the job losses? This logic is being questioned by a growing body of evidence from the National Minimum Wage. Despite the pre-introduction scare stories, there is little evidence of disemployment effects. Instead, the data points towards increased productivity gains: studies have highlighted how, unsurprisingly, workers feel more valued when paid fairly and respond by upping their effort. Others have shown how firms themselves adopt productivity-enhancing practices.

In a local and regional development context, the living wage could therefore support the move from our current winner takes all model. As a new report by the Smith Institute shows, extending the living wage could deliver economic benefits worth millions of pounds. With workers earning and spending more locally, the benefits ratchet up. And this ignores the wider savings to local public services like health.   

If this is to happen, local economic actors have a critical role to play in shaping firms’ decisions about how to compete. Beyond paying all local authority staff the living wage, take-up could be increased through living wage clauses in public procurement contracts and making skills and business support contingent on paying the living wage. The Living Wage Foundation and city leaders can also champion place-based approaches to tackling low pay.

Central government has a role, too. A third of someone’s increased pay to the living wage is taken from the local area by the Treasury. Rather than disincentivising efforts to promote inclusive growth, the Treasury should strike devo deals to promote the living wage. For example, gainshare arrangements could be agreed where part of the fiscal benefit to the Treasury is re-invested locally, creating an even bigger economic boost.

Growth does not have to come through a race to the bottom on wages: fairer wages can drive higher local growth. Whilst not a silver bullet, the real living wage offers local authority, city region and national policymakers a way of turning some of the warm words around inclusive growth into reality. Backing that vision should not only get the conference delegates cheering, but also the unsung workers who put the show on the road.

Paul Hunter is deputy director of the Smith Institute.


How can cities become more bike friendly? The Netherlands offers useful lessons

(Aurore Belot/AFP via Getty Images)

It might seem like cycling is in the DNA of the Netherlands, a country where even the prime minister takes his bicycle to work. But the Dutch haven’t always lived as one with their bikes. In the Amsterdam of the early 1970s, cars were considered the wave of the future. They can be seen filling up squares and streets in historical photographs, and killed an average of over two Amsterdammers per week, including many children.

It is nothing more than an “accident of history” that the Netherlands embraced cycling, says Marco te Brömmelstoet, the director of the Urban Cycling Institute in Amsterdam and a man better known as the city’s cycling professor. Today’s bike rider’s paradise was created after parents and activists took to the streets to protest “child murder” by car. A Saudi oil embargo, rising gas prices, concerns about pollution and anger about the destruction of entire neighbourhoods to build motorways did the rest. 

Amsterdam, 1958. Not a cyclist's paradise. (Keystone/Getty Images)

What’s important about this history is that it can be replicated in other cities, too. Of course, the Netherlands has certain advantages – it’s flat as a pancake, for example. But in the eyes of traffic reformers, the rise of e-bikes (and even cargo bikes) means there’s no excuse for prioritising cars everywhere. 

So how can cities, flat or not, follow Amsterdam’s path to creating places where cycling is a pleasant, safe and common way to get around? The Dutch have some tips. 

Separate bikes from car traffic

Any city could start painting dedicated bike lanes on the streets. But in the Netherlands, those white marks indicating space for cyclists are considered just a minor first step. 

“A line on the road is not enough. Motorists will ignore it,” says Frans Jan van Rossem, a civil servant specialising in cycling policy in Utrecht. If other cities want their residents to choose bikes instead of cars when dodging pandemic-era public transport, protecting them from fast-moving car traffic must be the priority, Van Rossem says. 

The Dutch research institute CROW developed a widely praised design manual for bicycle infrastructure, full of tips for creating these protected lanes: A row of vertical white posts or a curb can serve as a physical separator, for example. Still, cyclists tend to feel safest in a "solitary" path, separated from the road by grass, trees, or an elevated concrete island. 

“The main bottleneck, the main reason why people don’t cycle, is that they don’t feel safe,” Van Rossem notes. “To start, construct separate paths.”

Turn those bike paths into a network

Many cities may have some bike lanes on some streets, but leave cyclists to roll the dice everywhere else. Will conditions still be safe when they turn left or right? Often they have to continue their way without any protected facilities for cyclists. 

“In many cases, cities take fast action, without thinking it through very well,” says Lucas Harms. He leads the Dutch Cycling Embassy, a partnership between the Dutch government and several companies, which promotes Dutch bike knowhow globally. “Don’t build small pieces of bike lane from nothing to nowhere. Think about a network of cycling infrastructure.” 

Utrecht aims to have cyclists within 200 to 300 metres of a connected path anywhere in the city, Van Rossem says. Avoid constructing those paths in sketchy industrial areas, he warns. “A connection through an unattractive area may be fast, but won’t be used a lot.”

Embrace the ‘fietsstraat’, a street where bikes come first

On some streets, drivers have to give up their privileges. (Rick Nederstigt/AFP via Getty Images)

A peculiar Dutch invention called "fietsstraat" (cycling street) holds strong potential for the rest of the world, Kevin Krizek says. He’s a transportation professor from Colorado who spent three years at Radboud University in Nijmegen. 

On cycling streets, cars are “guests”, restricted by a speed limit of 30 kilometres per hour. Drivers are not allowed to pass, so cyclists comfortably dominate the road. In the Netherlands the fietsstraat is usually paved with red asphalt, to resemble a bike path and notify drivers of their secondary status. But creating a cycling street can be easy. “All you need to do is put signs at intersections,” Krizek says. The effect is revolutionary in his view. Drivers have to give up their privileges, and cyclists can take the lead. 

Some Dutch traffic experts worry the cycling street won’t work if a city doesn’t also have a robust cycling culture. In the Netherlands, drivers are aware of the perils of urban cycling because they too use bicycles. Moreover, Dutch cities use sophisticated “circulation plans” to direct cars away from city centres and residential areas, onto a few main routes. 

Without “calming” traffic this way, the cycling street could be a step too far, Harms says. “In a city like New York, where all roads are equally accessible and full, it’s better to separate bicycles and cars,” he says.

Redesign intersections for cyclists' safety

If cyclists have to cross intersections “at the mercy of the Gods”, you’re not there yet, says Harms. When he travels abroad, he often finds clumsily designed crossings. As soon as cars turn, cyclists may fear for their lives. 

Harms recommends placing physical barriers between cars and bikes in places where they must cross. The Dutch build elevated islands to direct traffic into separate sections. The golden rule: cars wait behind bicycles. That way, drivers can see cyclists clearly at all times. Barriers also force Dutch cyclists to turn left in the safest way possible. They cross the street first and wait for their turn again before making their way left.

“You can create that with simple temporary measures,” Harms says. Planters work fine, for example. “They must be forgiving, though. When someone makes a mistake, you don’t want them to get seriously injured by a flower box’s sharp edge.”

Professor Krizek points out how the Dutch integrated cycling routes into roundabouts. Some are small; some are big and glorious, like the Hovenring between Eindhoven and Veldhoven, where cyclists take a futuristic-looking roundabout lifted above the highway. Most of those traffic circles move high volumes of cars and cyclists through intersections efficiently and safely. For a simpler solution, the Dutch manual suggests guiding cyclists to quieter streets – crossing a block up or down may be safer. “Nobody knows how to do intersections better than the Dutch,” says Krizek. 

Ban cars, or at least discourage them

A man rides down from a three-level bicycle parking garage near Amsterdam's main train station. (Timothy Clary/AFP via Getty Images)

The quickest, most affordable way to make a city more bikeable is to ban cars, says Ria Hilhorst, cycling policy advisor for the City of Amsterdam. It will make streets remarkably safe – and will most likely enrage a significant amount of people. 

Amsterdam doesn’t outlaw cars, but it does deliberately make their owners feel unwelcome in the historic city’s cramped streets. Paid parking is hugely effective, for example. Many car owners decide to avoid paying and use bicycles or public transportation for trips into the city. Utrecht, meanwhile, boasts the world’s largest bicycle parking garage, which provides a dizzying 12,500 parking spots.

To further discourage drivers from entering the city’s heart, Amsterdam will soon remove more than 10,000 car-parking spaces. Strategically placed barriers already make it impossible to cross Amsterdam efficiently by car. “In Amsterdam, it is faster to cross the city on a bike than by car,” Harms says. “That is the result of very conscious policy decisions.”

Communicate the benefits clearly

Shopkeepers always fear they will lose clients when their businesses won’t be directly accessible by car, but that’s a myth, says Harms. “A lot of research concludes that better access for pedestrians and cyclists, making a street more attractive, is an economic boost.”

Try replacing one parking space with a small park, he recommends, and residents will see how it improves their community. Home values will eventually rise in calmer, bike-friendlier neighbourhoods without through traffic, Van Rossem says. Fewer cars mean more room for green spaces, for example.

“I often miss the notion that cycling and walking can contribute a lot to the city. One of the greatest threats to public health is lack of exercise. A more walkable and bikeable city can be part of the solution,” says Ria Hilhorst. “But in many countries, cycling is seen as something for losers. I made it, so I have a car and I’m going to use it, is the idea. 

“Changing this requires political courage. Keep your back straight, and present a vision. What do you gain? Tranquility, fewer emissions, health benefits, traffic safety, less space occupied by vehicles.” 

Again, she points to Amsterdam’s history. “It is possible; we were a car city too.”

Karlijn van Houwelingen is a journalist based in New York City.