Living Wage Commission reveals blueprint for lifting 1m out of low pay
20 Jun 2014 10:34 AM
The number of people in low pay in the UK can be
slashed by over 1 million by 2020 with a series of pragmatic low-cost measures
building on the economic recovery, according to the final report of the
independent Living Wage Commission, chaired by the Archbishop of York, Dr John
The report follows the most
comprehensive analysis to date of low pay, conducted over 12 months by leading
figures from business, trades unions, academia and civil society. It
*More than 1 million people can
be lifted out of low pay by 2020, with research indicating this will have no
adverse economic consequences
*The cost of increasing the pay
of nearly 500,000 public sector employees to the Living Wage could be more than
met by higher tax revenues and reduced in-work benefits from over 600,000
private sector employees also brought up to the Living Wage
*Professional service firms,
like accountancy and consultancy companies, have nearly 300,000 low-wage staff
who could be paid the Living Wage by 2020, and the banking and construction
industries could pay the Living Wage to 75,000 employees with an increase to
their wage bills of less than 0.5%
*This extension of the Living Wage depends on the
government adopting an explicit goal to increase the voluntary take-up of the
Living Wage to at least 1 million more employees by
*The measures for the government
to encourage such a transition include requiring all publicly listed companies
to publish the number of people paid below a Living Wage.
The Commission warns that, if
the government does not support the voluntary extension of coverage of the
Living Wage, some working families will continue to rely on emergency measures,
such as food banks and unsustainable debt, to get by. Currently 5.2
million people earn less than the Living Wage and the majority of people in
poverty are now in working households.
However, the Commission has not
recommended the introduction of a compulsory Living Wage, warning that the
increased wage bill would not be affordable for some firms in some sectors,
such as retail and hospitality, and for many small firms.
According to the Commission, a
Living Wage for the lowest-paid staff can lead to increased productivity,
reduced staff turnover and improved morale.
The Archbishop of York, Dr John
Sentamu, Chair of the Living Wage Commission, said: “Working, and
still living in poverty, is a national scandal. For the first time, the
majority of people in poverty in the UK are now in working
“The campaign for a
Living Wage has been a beacon of hope for the millions of workers on low wages
struggling to make ends meet. If the government now commits to making
this hope a reality, we can take a major step towards ending the strain on all
of our consciences. Low wages equals living in
Dr Adam Marshall, Director of
Policy and External Affairs at the British Chambers of Commerce, said:
“The return to economic growth means that many employers are now
looking again at increasing levels of pay for their employees after a tough
period for business.
“Many thousands of
companies already pay their employees a Living Wage, and many more have an
aspiration to do so. As the recovery gathers pace, they should be supported and
encouraged to make this happen without facing compulsion or regulation, which
could lead to job losses and difficulties particularly for younger people
entering the labour market.
simply cannot afford to pay a Living Wage just yet – which is why the
Commission rejected a compulsory Living Wage. The task now is to support as
many employers as possible to make this transition, because paying the Living
Wage can benefit employers as well as their staff.”
Frances O’Grady, General
Secretary of the TUC, said: “The economy might be growing again but
workers – especially the lowest-paid – are struggling to get by as
wages continue to lag behind the cost of living. Increasing the number of
workers on the Living Wage would help ensure that ordinary people can start to
share in the fruits of the economic recovery.
“But as it stands many
families simply cannot make ends meet. They find it hard enough pulling
together the money to pay for everyday essentials. Trying to come up with extra
cash to cover the cost of expensive childcare when the schools are closed for
the summer holidays or to replace a broken fridge either means getting by
without or going further into debt.
“We now have the
perfect opportunity to transform the lives of millions of people in low-paid
households. The Living Wage allows families to afford the goods and services
that those in better paid jobs take for granted. It means more jobs will pay
enough to cover everyday essentials, and that surely is not too much to
nbsp; Work that pays: The final report of the Living Wage Commission
is published on Tuesday 24 June 2014.
nbsp; For more information, interviews, and an embargoed copy of the report
please contact Leo Barasi: firstname.lastname@example.org; 020
7793 4036 or 07830 819121; or Natasha Dyer: email@example.com
a>; 020 7793 4035 or 07590 024387.
nbsp; The Living Wage Commission is a 12-month independent inquiry into the
opportunities and barriers to the Living Wage. The Commission looked at the
potential for an increase in coverage of the Living Wage, and at the business,
economic and moral cases for paying the Living Wage.
nbsp; The Living Wage Commission is chaired by the Archbishop of York, Dr John
Sentamu, and includes Frances O’Grady (General Secretary, TUC), Dr Adam
Marshall (Director of Policy & External Affairs, British Chambers of
Commerce), Victoria Winckler (Director, Bevan Foundation), Sir Stuart
Etherington (Chief Executive, NCVO), Kate Pickett (Co-author, The Spirit Level;
Co-founder of the Equality Trust), Guy Stallard (UK Head of Facilities, KPMG)
and Wendy Bond (low-paid worker representative).