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Bar staff and shop assistants among those most likely to live hand to mouth because of low pay, warns report
More than a fifth of UK workers earn less than the living wage, with bar staff and shop assistants among the most likely to live “hand to mouth” because of low pay, a report warns on Monday.
Published to mark living wage week, the research also finds that younger workers, women and part-timers are more likely to be paid less than the living wage, a voluntary threshold calculated to provide a basic but decent standard of living. New living wage rates will be announced on Monday, with the current rate at £8.80 per hour in London and £7.65 elsewhere.
The report by consultancy firm KPMG adds to evidence of low pay remaining prevalent in Britain, despite the economic recovery. The proportion of employees on less than the living wage is now 22%, up from 21% last year, the study found. In real terms, that was a rise of 147,000 people to 5.28 million.
The Trades Union Congress (TUC) urged more employers to adopt the pay benchmark, following news that more than 1,000 companiesrepresenting around 60,000 employees are now committed to the wage and will adopt the new rate on Monday. Frances O’Grady, the TUC general secretary, said: “Low pay is blighting the lives of millions of families. And it’s adding to the deficit because it means more spent on tax credits and less collected in tax. We have the wrong kind of recovery with the wrong kind of jobs – we need to create far more living wage jobs, with decent hours and permanent contracts.”
Alan Milburn, the government’s social mobility tsar, said both employers and government must do more to make Britain a living wage country.
“This research is further proof that more workers are getting stuck in low paid work with little opportunity for progression,” said the former Labour cabinet minister, now chair of the government’s Commission on Social Mobility.
“It is welcome that the number of accredited living wage firms has increased. But far more needs to be done to help millions of people move from low pay to living pay.”
The research, conducted by Markit for KPMG, shows 43% of part-time workers earn less than the living wage, compared with 13% of full-time employees.
It found 72% of 18-21 year olds were earning less than the living wage, compared with just 15% of those aged 30-39. One in four women earn less than the benchmark, compared to 16% of men.
“Far too many UK employees are stuck in the spiral of low pay,” said Mike Kelly, head of living wage at KPMG.
“With the cost of living still high, the squeeze on household finances remains acute, meaning that the reality for many is that they are forced to live hand to mouth,” added Kelly, also chair of the Living Wage Foundation.
By region, the proportion of workers earning below the living wage is highest in Northern Ireland at 27%, followed by the north-east and Yorkshire and Humber, both at 25%. The lowest proportion was in London.
The occupations with the highest proportion of sub-living wage earners are bar staff at 90% followed by waiters and waitresses at 85% and kitchen and catering assistants at 80%. Sales and retail assistants were also high up that list at 70% and were highest when measured by number of below-living wage earners, at 760,000 people.
The living wage campaign was launched in 2001 by Citizens UK, an alliance of community organising groups. It compares with the national minimum wage at £6.50. The number of employers committing to paying the rate has picked up rapidly in recent years. Growth in accredited living wage employers averaged 10 per year in the first decade of the campaign but accelerated to some 300 additional employers in 2013 and more than 500 in 2014, according a separate report published on Monday by Citizens UK and Trust for London, the biggest funder of the living wage campaign. The campaign has been boosted by some big employers signing up in recent months, including food manufacturer Nestle and bank HSBC. More than 1,000 are now signed up in total.
But some types of business remain stubbornly resistant to the living wage, according to the report, compiled with independent research by Cambridge Policy Consultants. Sectors where low wages are a fundamental part of the business model, in particular retail and the social care sector, were seen as most challenging.
Employers were not yet swayed by the bottom line business case for the living wage, such as the potential to raise productivity, the report found. But they did see alternative soft business benefits such as improved staff morale and a better reputation among customers.