20% of UK Employees Earn Below the’ Living Wage'

  4th September 2013      
 Company News

The issue of UK employees not receiving wages that accumulate to that of the ‘living wage’ is reaching crisis point. As a survey suggests almost 20% of the British workforce are earning less than what is described to be pay that will cover general living costs.

Living wage is an amount set by the Resolution Foundation which is a think tank who gathers information to realise the living outgoings against what is necessary in one’s wage packet.

The sad truth of the matter means that a total of 4.8 million Britons, 20% of employees, are in this bracket; scratching a living, while these figures show an increase from 3.4 million in 2009.

The living wage is set currently at £7.45 an hour or £8.55 in London, very different to the government minimum wage of £7.20 an hour outside London and £8.30 in the capital, which is revised annually in April.

Matthew Whittaker, senior economist at the Resolution Foundation and contributed to this report, said: “For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.

“This means an increasing struggle to keep up with the cost of living.

“Britain has a sorry story to tell on low pay. Only a handful of our close competitors do worse and the large majority have much lower rates of low pay – sometimes half as much.

“The challenge for all parties is to find ways of boosting rates of pay, especially for those who earn less, without putting economic growth at risk.”

More vital statistics looked at the socio-economic groups involved, showing signs of a  growing two-tier workforce in the UK, in which the lower tier is characterised by low-paid, low-skilled work, which is often temporary, part-time or self-employed.

With regards to mainstay age groups, there seems to a significant fall in low pay among older workers, those aged 60 and older. In 1995, about 35% of older workers were in low-paid jobs, which dropped to 24% on 2012. While in the same period the number of low-paid younger employees (aged between 16 and 30) has grown from 26% in 1995 to 37% in 2012.

The think tank also found that 77% of employees aged under 20, and two-thirds of restaurant and hotel workers, earned less than the living wage.

This adds fuel to the ever growing fire of fear about the long-term jobless and low paid youth generation and its impact on the not too distant future of the job market. This also hampers moral for career aspirations and blights the ambition of those with great talent, stuck in dead-end jobs and never achieving their true potential.

The survey also looked at gender comparisons with 25% of women being paid below the living wage in 2012 while only 15% of men  where feeling the impact, however overall the figures in 2012 showed a marked increase for both sexes , up from 18% and 11% in 2009 respectively.

A Government spokesman said: “We encourage employers to pay above the national minimum wage when they are profitable and when it’s not at the expense of jobs, which is what the Low Pay Commission takes into consideration when it sets the national minimum wage.

“Despite being in tough times, this Government is doing absolutely everything it can to help people on low pay with the cost of living.

“That’s why we’re taking two million people out of tax altogether, cutting income tax for those on low incomes and freezing council tax.”

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