The Living Wage Myth
Take a typical company that employs low paid works. It could be a bank, which also employs many well paid traders and managers and backroom people. The company pays its workers £60 per hour from all forms of income, but pays its cleaners only £8 per hour, below the living wage - £9.45 in 2016. Because it employing its own cleaners, paying them below the living wage, it cannot claim to pay all its workers the living wage.
One day it makes all its cleaners redundant and hires an outside company to carry out the work. The company either employs its own cleaners or hires the now unemployed cleaners. Whatever it does, it pays only £8 per hour. The bank can now claim to pay all its workers the living wage - in fact, having made its lowest paid workers redundant, the average hourly wage paid by the company has risen, but the hourly wage paid to the cleaners - who may even be the same people - has fallen.