Talking to business about poverty

How does the social sector engage with employers in a constructive way?

“The business of business is business”, said Milton Friedman in the 70’s and despite all the changes in society, economy and technology since then, this view is still widespread – especially in the business community.

While there have been great advances in the realm of corporate social responsibility, the age of austerity means businesses are being asked by both policy makers and the public to do more to deal with issues like poverty.

Ultimately though, interventions on poverty are going to cost money. The simplest ones will involve putting up pay, in which case the implications for the wage bill are obvious. More sophisticated solutions, such as expanding flexible working or support with childcare, still put a line under costs in the ledger that otherwise wouldn’t be there.

Therefore, the nature of this ask is important; how do we convince businesses to voluntarily subtract from their own concrete bottom lines to end something as nebulous as poverty?

Perhaps the answer can be found in those businesses who are already taking action. Dr Peter Kenway, Director of the New Policy Institute had conducted in-depth interviews with 21 organisations paying the Living Wage, which is £1.05/hr higher than the current statutory, National Living Wage and £2.20/hr higher in London. He discussed his findings as part of an event this week, organised by the APPG on Poverty and the Webb Memorial Trust.

In all the businesses he spoke to, “tackling poverty was not and is not their primary purpose in paying the Living Wage”. Indeed, the word poverty made many of the organisations uncomfortable, especially (unsurprisingly) when it was presented as a consequence of their business activity.

So if businesses are not taking socially positive actions such as paying the Living Wage out of altruism, why are they? And what can we learn that anti-poverty campaigners and others looking to influence business can leverage?

Many of the employers believed that becoming living wage employers had differentiated them from their competitors.  As Dr Kenway pointed out “it [the Living Wage] is understood by the public and approved by the public” and so offers a clear route into the minds of the socially conscious consumer.

This is undoubtedly one of the strongest positive cases, the marketing potential of doing the right thing, especially in generally low waged sector where it can be a real stand-out differentiator. In general, positive arguments that use the business case and avoid the language of morality are most likely to be influential. Talking to businesses about paying higher wages to reduce employee turnover, and the costs and productivity benefits associated with that, is far more persuasive than throwing around terms such as poverty and responsibility.

It is worth remembering that within a business this may be a live debate and the right language needs to be deployed to help those arguing for change. For example, some large businesses might have a sustainability team and the conversation may need to be framed in those terms, others might have strong community ties that can be played on.

Across all business though, Dr Kenway’s study found ‘poverty’ to be a very unhelpful word, not least because many people were unwilling to describe themselves as in poverty even when they were – leading employers to believe none of their employees were in this position. Alternatives suggested by businesses included “fairness”, “doing the right thing” and “staff wellbeing”. Using these as topics to kick off conversations can be effective and will allow people within an organisation to engage and speak up without the stigma of ‘poverty’ hanging over them.

Of course there is a hard rump of employers, the Sports Direct’s of this world, who do not want to talk, do not want to engage – whatever the language used or the benefits proffered. However, another speaker at the event Dr John Philpott, Director of The Jobs Economist and an experienced labour market economist who has conducted research on this issue for the Joseph Rowntree Foundation, estimates this hard core is only approximately 10-15% of UK businesses. That leaves 85% or 2,918,713 companies, with countless employees who are open to talking about their role in ensuring all of those employees have an acceptable quality of life. We need to make sure that we are not using moralising language, or trying to berate or shame them into action but instead are talking to them in language they understand and appreciate.

The event, kindly organised by the Webb Memorial Trust, is part of their ongoing work looking at different solutions to the problem of poverty in the UK. They have also commissioned us to produce a report on what business can do specifically, which you can find that here.

Image licensed under Creative Commons.