In the last year the problem of in-work poverty has been underlined by research which estimates that there are now 5.24 million people being paid less than the Living Wage, an increase of around 400,000 from an estimated 4.82 million in 2012’s report. This highlights the fact that whilst the Living Wage has grown rapidly and successfully as a concept, wider take-up is needed if more people are to earn a wage that supports a basic standard of living.
The research, conducted for KPMG (a principal partner of the Living Wage Foundation) by Markit, suggests that 21% of employees are being paid less than the Living Wage, up from 20% a year ago. This 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).
Unsurprisingly, 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%).
Rhys Moore, Director of the Living Wage Foundation said: “The combination of low pay for women, and the increased likelihood of a part-time job being paid below the Living Wage than a full time equivalent, means that women are suffering significantly with the problem of in-work poverty. The Living Wage Foundation is working with charity, Citizens UK, to highlight the benefits a Living Wage offers to businesses and employees, particularly in the heavily female dominated sectors of care work and retail.
“The Living Wage is a voluntary scheme, and the best employers are acting now and rewarding a hard day’s work with a fair day’s pay.”