0757 GMT January 25, 2020
The real living wage (RLW), which is promoted by the Living Wage Foundation and is voluntarily paid by more than 3,500 UK employers, is based on what people need to live a decent and healthy lifestyle as determined by a panel of experts. It is currently £8.45 across the UK and £9.75 in London. It differs from the government’s national living wage, which is £7.50 an hour for those 25 or older, according to The Guardian.
A poll carried out for the Living Wage Foundation also found that more than a third of people earning less than this had topped up their monthly income with a credit card or loan in the last year, while more than one in five reported using a payday loan to cover essentials. More than half had declined a social invitation due to lack of money, and just over half had borrowed money from a friend or relative.
“This is the sad reality of life for people who are in working poverty in the UK,” said Katherine Chapman, director at Living Wage Foundation.
“We’ve seen the increasing use of food banks and other worrying trends. That’s why it’s more important than ever that employers are showing leadership and standing up and making a public commitment to paying the living wage.”
The foundation, which will announce the new hourly living wage rate, said that with the cost of living rising at its fastest pace in four years, the need for a living wage has become paramount.
A third of FTSE 100 companies as well as Google, Everton, Liverpool and Chelsea football clubs pay the RLW, and more than 150,000 employees have received a pay rise as a result of the campaign. More than £600 million has been paid to workers since it began in earnest in 2011.
“In the last couple of years we’ve seen certain sectors, like retail, really grow,” Chapman said.
“Ikea signing up a couple of years ago was huge. The movement has grown from strength to strength. In the past year alone we’ve accredited more than a thousand employers.”
However, a separate poll for consultancy giant KPMG before this week’s living wage week found that more than one in five people in the UK are still earning below the RLW. While the number has dropped by 100,000 to around 5.5 million since last year, the first reduction in five years, it means a million more people earning below the RLW than in 2012.
Part-time workers are particularly vulnerable to low pay. Around 3.1 million part-time employees earn less than the RLW compared with 2.4 million full-time workers, according to KPMG.
The KPMG research found that a deep gender divide continues to operate. One in four women earn less than the RLW, compared with 16 percent of men.
Almost three-fifths of those earning below the RLW said they had experienced a sharp increase in the cost of living. There is also acute regional variation. Some 26 percent of workers in Northern Ireland earn below the RLW, the highest proportion in the UK, and a quarter of workers in the East Midlands, Yorkshire and Humber, Wales and the West Midlands are also earning below the threshold.
Andy Bagnall, director at KPMG UK, said that, historically, some businesses believed that paying the real living wage would hit them financially. But he suggested there was evidence to the contrary.
“In the past, many businesses were worried that increased wages would hit their bottom line, but there is ample evidence to suggest otherwise.
“By paying the real living wage since 2006, KPMG has seen improved staff morale, a rise in service standards, improved retention of staff and increased productivity. More importantly, it has been an enabler for social mobility.”