29 Oct 2012

A fifth of workers ‘paid less than living wage’

One in five British workers are paid less than the living wage, the rate of pay designed to enable workers to afford a basic standard of living, claims new research.

Some 4.82 million UK workers receive less than the living wage, the research from KPMG showed.

The hourly rate needed to maintain the living wage is currently £8.30 an hour in London and £7.20 in the rest of the country, compared with the national minimum wage rate of £6.19 an hour.

At a time of economic hardship, lower paid workers are feeling the impact hardest, the accountancy firm said, with more than four in 10 (41 per cent) saying that their finances are worse now than they were just one month ago.

The living wage means that low-paid workers don’t have to make tough choices over whether they can afford the everyday things that most of us take for granted. Frances O’Grady TUC

The living wage is a voluntary rate of pay that some employers give their staff and since 2001 it has positively impacted more than 10,000 employees and their families and redistributed more than £96m to some of the lowest paid workers in the UK, KPMG said.

But ahead of the living wage week on Monday, the study claims that a sizeable proportion of the country’s workers are paid less than this rate.

Northern Ireland

Northern Ireland has the highest proportion of people earning below the living wage (24 per cent), followed by Wales at 23 per cent.

The lowest proportion of sub-living wage earners are in London and the South East, both at 16 per cent.

But by number of people rather than proportion, London (570,000), the North West (also 570,000) and the South East (530,000) are the most affected areas.

Workers in the hospitality industry are the worst affected, with 90 per cent of bar staff paid lower than the living wage.

More than four out of five waiters and waitresses (85 per cent) were also paid less than the living wage.

Kitchen staff

Three quarters (75 per cent) of kitchen and catering assistants, as well as launderers and dry cleaners, were paid less than the living wage, the study showed. Some 70 per cent of cleaners and florists also received less than the living wage.

Commenting on the study, TUC general secretary designate Frances O’Grady said: “It is shocking that in this day and age one in five workers is still earning less than is needed to maintain a decent standard of living.

“The living wage is not a luxury and means that low-paid workers don’t have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children.

“Many more employers could afford to adopt the living wage and we hope that many more decide to pay it in the coming months. Now more than ever is the time for employers to put an end to poverty pay.”

Marianne Fallon, of KPMG, said: “This research really lays bare the extent of the problem of low pay in Britain. Times are difficult for many people, but of course those on the lowest pay are suffering the most.

“With Living Wage Week fast approaching, we would urge more big employers to consider paying their staff a wage that means they can afford a socially acceptable quality of life. “

Rhys Moore, director of the Living Wage Foundation, said: “Paying a living wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country.

“It is really encouraging to see nearly 100 organisations now signed up and accredited. But that still leaves many more organisations that aren’t. We hope that Living Wage Week will create real momentum and that many more employers will sign up.”