Lessons from Across the Pond: How the Living Wage Foundation Is Exporting Its Success to the U.S.

The past four decades haven’t been good ones for American workers — and simultaneously, nearly 40 years’ worth of funder-initiated efforts to study and reform philanthropy’s role in the nonprofit starvation cycle hasn’t borne much fruit for the nonprofit workforce. Minimum wage reform is currently impossible at the federal level, and ranges from difficult to requiring a miracle from one state to the next. But across the pond in the U.K., one organization has had what seems to be significant success convincing for-profit employers to pay a living wage — and convincing funders to make grants that allow nonprofits to pay a living wage, as well. Now, the Living Wage Foundation wants to export that success to the United States.

In the U.K., the Living Wage Foundation has convinced more than 12,000 of that country’s employers to pay a living wage and has successfully pushed 70 philanthropic funders to cover living wages for their grantee partners. Its new U.S. affiliate, Living Wage for US, was officially launched in March and seems to be off to a powerful start. The organization says it has already worked with more than 300 private sector employers, certified 30, and hopes to announce its own accreditation program for nonprofit funders during Living Wage Week this November.

The easiest way to describe the Living Wage Foundation and its American counterpart is to liken them to a Better Business Bureau. Instead of customer service, though, the foundation focuses on wages. Founded in 2001, the U.K. organization says it has accredited more than 12,000 Living Wage Employers. In addition to supporting and advising employers through its accreditation process, the organization’s work includes publicizing real living wage rates every year based on costs of living in the U.K., publishing research related to living wages, and coordinating an annual Living Wage Week. The foundation says that it has put £2.1 billion back into the pockets of workers and delivered pay raises to nearly 430,000 workers a year.

As in the United States, the United Kingdom has a legislated minimum wage, which is £10.42 (roughly $13 an hour) for workers aged 23 and above. According to the Living Wage Foundation, however, real living wages for 2022–2023 are somewhat higher, at £10.90 per hour outside of London, and £11.95 per hour in London. Accredited Living Wage Employers agree to pay at least those rates to all workers aged 18 and above.

In addition to its work with private sector employers, the Living Wage Foundation works with philanthropies through its Living Wage Funder project. According to Living Wage, accredited foundations commit to enable and encourage grantees to pay the living wage, pay grant-funded workers at the living wage, and “capitalize on the power of their networks to influence change among their investees, other funders, social impact investors and councils.” In other words, the U.K.’s Living Wage Funders would probably receive all A’s on the Worker-Friendly Funder Report Card that we published in March.

After starting its Living Wage Funder program at the behest of local foundations eight years ago, the Living Wage Foundation has made significant headway compared to similar efforts here in the U.S., which, for nearly 40 years, have overwhelmingly focused on nonprofits’ financial health as opposed to specifically targeting wages. The foundation says it has only certified 70 of the U.K’s thousands of foundations and charitable trusts, but the foundations that have been certified collectively range from national-level organizations like Comic Relief, People’s Health Trust, Nesta, and the enormous Wellcome Trust to small family funds and local and city councils.

According to a Living Wage U.K. spokesperson, “Third sector accreditations to the real Living Wage now cover over 3,000 voluntary organizations, amounting to 50,000 low paid workers getting a pay rise as a result.”

Exporting success

With 20 years of success under its belt, the Living Wage Foundation announced the formal launch of the Global Living Wage Affiliate Network in March. Living Wage for US is the first affiliate organization under the program, and it’s off to a great start. Actually founded in 2021, Living Wage for US is headed by CEO Michelle Murray, who brings roughly a decade of experience in living wage advocacy to the table. David Rolf, the Service Employees Union organizer who helped lead the fight for a $15 minimum wage in Seattle, is chairman of the group’s board. In the organization’s first year, Murray said, Living Wage for US secured over $100 million in wage increases for U.S. workers. Roughly 300 companies are currently engaged in the organization’s system, and the organization has accredited 30 employers.

Living Wage for US also brings a sizable research component to the table. Going beyond MIT’s Living Wage Calculator, the organization has done a deeper dive that takes into account the cost of living within employers’ commuting zones and factors like the money that employers save employees by providing benefits like health insurance and subsidized child care. The organization uses the global model for calculating a living wage, which involves basing the wage on living costs of what Murray said is a statistically typical family size with a statistically typical number of workers — that is, a family of four with two adults and two children, in which one of the adults works approximately 40 hours a week and the other works approximately 30 hours per week.

The use of this calculation, Murray said, means that participating employers enable their workers to build families even if they don’t currently have children. “You want to make sure that if workers choose not to have children, that’s the worker’s choice,” Murray said, not one that’s forced on them because they can’t afford to raise children.

While Living Wage for US received some initial backing from funders like the Hershey Foundation and Oxfam America, Murray said the vast majority of its funding comes from companies that hire it to conduct living wage gap analyses and research ways to help them provide better wages and benefits. While the organization charges for supporting companies through the formal Living Wage accreditation process, Murray said it doesn’t depend on certification fees because doing so would create pressure on the group to soften its standards.

However, that’s not to say that Living Wage for US doesn’t want foundation money. In fact, the organization has started holding meetings with working groups of funders. In the nonprofit arena, the organization hopes to revise its assessment systems to make it possible for nonprofit employers to access them for free and to launch a certification program for philanthropic funders like the one in the U.K. Murray said her organization aims to launch both efforts during Living Wage Week, which begins on November 6.

“We’re in a lot more funder discussions on multiple levels to say, ‘Can we get some more support to scale up?,’ because that’s really our biggest need right now,” she said.

Given current employment realities in this country, the carrot approach championed by the Living Wage Foundation and Living Wage for US may seem like a naive one to take. But public opinion has swayed corporations on issues like LGBTQ+ equality, and diversity, equity and inclusion more broadly. If offering a certificate and public acknowledgment to employers and funders alike will encourage some of them to do the right thing by workers, that’s still a welcome development — even if it won’t, by itself, oblige the majority of organizations to change.

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