Employers urged to pay the real Living Wage

By Agencies
April 1, 2018

On 1 April 2018, the government’s National Living Wage (NLW) will rise from £7.50  per hour to £7.83 for workers over 25.

Research conducted by the Living Wage Foundation shows that a worker on the new government minimum would earn an annual salary worth £1,794 a year less than the real Living Wage, based on what employees and their families need to get by. It would take 33 additional working days to make up this shortfall, the equivalent of working over six weeks extra every year.

This additional £1,794 could pay for:

  • More than six months’ food and drink bills for an average household - £1,508
  • Over a year’s average gas and electricity bills - £1,250
  • Almost 3 months' average rent - £1,738

For workers in London the gap is even wider, with full-time workers earning the new government minimum set to earn £4,622 less than those earning the independently-calculated London Living Wage. These workers would need to work 84 more days to earn a real Living Wage, or nearly four months.

The gap between the government minimum and the real Living Wage is widest for young people aged 18-20. They would earn just £11,505 a year, or £5,558 a year less than a full-time worker of the same age earning a real Living Wage. They would need to work 135 extra days, or over six months longer, to earn a real Living Wage.

Tess Lanning, Director of the Living Wage Foundation, said, “We welcome any steps to close the gap between the government minimum and the wage employees and their families need to get by. But over 5.5 million workers still earn less than the real Living Wage calculated according to what people need to live. For these people, this is the difference between struggling to make ends meet and being able to cover the basics, from decent meals to heating bills, to the cost of a birthday cake for their children. The only way we will fully close the gap is for more businesses and organisations to voluntarily choose to pay the real Living Wage, not just the government minimum.”

Commenting on the analysis, TUC General Secretary Frances O’Grady said, “Millions of families are struggling to keep up with the cost of living. The real Living Wage would make a huge difference to Britain’s lowest paid.

“But more companies need to sign up to it. With profits high there's no excuse for not investing in staff.

“Good employers know the value of paying the real Living Wage. It reduces [staff] turnover and boosts productivity levels.”

* Living Wage Foundation https://www.livingwage.org.uk/

* TUC https://www.tuc.org.uk/


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