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The new Living Wage rate has been announced as £7.65 an hour in the UK and £8.80 an hour in London as research shows the number of people earning less than a Living Wage has increased to more than 5 million.
The Living Wage is a voluntary rate of pay which is based on the recognition that the national minimum wage (currently £6.31) does not pay enough for people to meet a basic quality of life.
Research published at the weekend by KPMG found the number of people in the UK earning less than a Living Wage has grown by 8% in the past year, from 4.8million to 5.2million. The research found nearly three quarters of people aged 18-21 did not earn the Living Wage and that women and part time workers were disproportionately affected.
The research suggests that 21% of employees are being paid less than the Living Wage, up from 20% a year ago. This, it says, has largely been driven by living costs outstripping earnings growth – median hourly wages have risen by just 1.1%, while the Living Wage rate increased last year by 3.5% nationally and 3% in London (also less than the rise in the cost of essential goods).
The proportion of jobs paying below the Living Wage is highest among the younger age groups, with 72% of 18-21 year olds receiving less than the Living Wage, which then falls to 27% of 22-29 year olds. Women are also significantly more affected than men (27% compared to 16%), while part-time workers are far more likely to receive low pay than full-time workers (43% compared to 12%).
The research also finds that sub-Living Wage pay is less prevalent for direct employees in the public sector (less than 10% of the workforce) than it is in the private sector (27%), largely due to differing job types. In addition, many low paid workers in the public sector are employed by private contractors.
The number of children living in households earning less than the Living Wage has increased from 1.82million to 1.96million, according to new research by Save the Children.
KPMG and Save the Children are Principal Partners of the Living Wage Foundation, the body which accredits Living Wage Employers.
Rhys Moore, Director of the Living Wage Foundation, said: “With working poverty on the rise, paying a living wage is becoming a must for every responsible employer. We are working with businesses across the UK to help them do the right thing, so that from the CEO to the cleaner, hard work pays.”
The Living Wage Foundation is an initiative of Citizens UK. Citizens UK started the Living Wage campaign in 2001.
Neil Jameson, Director of Citizens UK, said “This research shows that more hard working families are struggling to get by. This is the week for every employer to consider how you treat your lowest paid staff. The cleaner, the shop assistant and the care worker deserve a Living Wage which allows them to live and not just survive.”