New report says five million workers excluded from recovery

By staff writers
February 9, 2014

A new report, Working for Poverty, from the Living Wage Commission (a 12 month independent inquiry into the future of the Living Wage, chaired by Archbishop of York John Sentamu) says the economic recovery will have no effect for one in five workers unless employers pay a Living Wage.

The report describes rising living costs and stagnating wages having created a ‘double squeeze’ on low-paid workers. It says this will not be relieved by the economic recovery and taxpayers will pick up the bill.

The report’s other findings include:

- Real average wages have grown by only 13 per cent since 1999, whereas economic output has risen by four times this rate
- Housing costs have tripled in the past 15 years (this is one and a half times the amount by which wages have risen)
- Electricity, water and gas bills have risen by 88 per cent in the last five years

The report found that 5.24 million workers in Britain (21 per cent of the workforce) are paid below a Living Wage – an increase of 420,000, or nine per cent over the last 12 months.

Despite the government’s emphasis that poverty is caused by welfare dependency, the report claims that 6.7 million of the 13 million people in poverty in the UK are in a family where someone works. This is the first time, that working households have represented more than half the total of those in poverty.

The Trades Union Congress (TUC) General Secretary Frances O’Grady commented:“The UK economy may be in recovery mode, but most people’s pay packets have yet to experience a similar revival. For those families firmly stuck in low-pay Britain, life is tough, and they continue to struggle to make their wages stretch far enough to meet the cost of food, fuel and other essentials.

“Low pay is blighting the prospects of millions of workers, and we need urgent action to tackle the UK’s serious, and worsening, low-pay problem.

“One way of easing the financial pressures on low-paid families would be for more employers to pay the living wage. Across the country, there are many companies and organisations which could afford to do so, yet they continue to pay their staff poverty wages.

“If the recovery is to be one experienced by everyone in the UK, ending the squeeze on incomes and boosting pay – especially for those on low incomes – is essential. As this report shows there are many people in Britain who very definitely need a pay rise.”


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