February 14, 2014 - Rachel Miller
An interim report by the Living Wage Commission has found that more than half of those defined as "in poverty" are also in work, and it is urging employers to pay staff the living wage as a minimum.
The report states UK employment "is becoming increasingly unequal", with 420,000 more people being paid below the so-called 'living wage' in the past 12 months. In total, 5.24 million workers (21% of the workforce) are paid less than the living wage.
The commission has called for more employers to pay a living wage of £8.80 in London and £7.45 for the rest of the UK, which is above the current national minimum wage (NMW) of £6.31 for people aged 21 and over.
Dr John Sentamu, Archbishop of York and chair of the Living Wage Commission, said: "The idea of 'making work pay' increasingly sounds like an empty slogan to the millions of people who are hard-pressed and working hard and struggling to make a living. A living wage allows those that receive it an income that is sufficient to live on. For business, there is no better measurement of fairness and decency than paying a living wage to every employee."
He added: "We know that not every employer could afford to implement a living wage right now. Yet we also know there are definitely employers that are able to pay a living wage but choose not to."
Commenting on the report, John Longworth, director general of the British Chambers of Commerce (BCC) said: "We applaud all of those businesses that pay, or aspire to pay, their staff above the living wage. That includes a huge majority of Chamber of Commerce members, with 61% paying all staff at or above the living wage, and a further 20% paying most staff above the living wage rate."
Longworth added: "Britain shouldn't aspire to be a low pay, low skills economy. It should aim to be a high pay, high skills economy. Yet many businesses tell us that there is a limit to what they can afford. 60% of companies say that at present, the National Minimum Wage should rise – but by no more than inflation. It is also wrong to pile higher wage costs on employers, who produce the wealth that is essential to our country and our people – particularly when the government continues to tax low earners."