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Updates from the Living Wage Foundation

4.8 million jobs in the UK pay below the real Living Wage

  • 1 in 6 (17.1%) of UK jobs pay below the real Living Wage, a significant decrease from last year’s figure of 5.4 million (1 in 5 or 20.2 per cent) 
  • Women (20.4 percent) are more likely to earn below the real Living Wage than men (13.9%) 

  • Part-time workers (33.2%) are more likely to earn below the Living Wage than full-time workers (11.0%) 

  • Workers from racialised groups (19.4%) are more likely to earn below the real Living Wage than white workers (16.3%) 

New research by the Living Wage Foundation demonstrates the scale of low pay in the UK, with 1 in 6 workers in the UK earning less than the real Living Wage. This equates to 17.1% of all employee jobs and a total of 4.8 million.  

There has been a significant decrease compared to last year where 5.4 million jobs paid below the real Living Wage - the largest drop ever recorded in percentage point terms. However, the report highlights that a key factor in the drop has been increased levels of unemployment in low-paid sectors such as hospitality and retail.  

That is not to say there has not been a genuine increase in pay. Record levels of Living Wage accreditation over the last 12 months is one key contributing factor for decrease in low paid jobs. There are now almost 9,000 businesses paying the real Living Wage and over 3,000 new signing up since the start of the pandemic. Accredited businesses include Aviva, Burberry, LUSH, Everton FC and thousands of small-to-medium-sized businesses. 1 in 13 employees now work for a Living Wage employer. [1] 

The real Living Wage is the only rate calculated based on what people need to live on. It currently stands at £9.50 (UK) and £10.85 (London) but the new rates will be announced tomorrow. Tomorrow’s announcement will see 300,000 UK workers employed by accredited businesses receive a pay rise in line with the true cost of living. 

Who is most likely to earn below the real Living Wage? 

Today’s report shows that jobs held by women, racialised groups and part-time workers are most likely to pay below the real Living Wage.  

  • On gender equality, the proportion of female employees earning less than the real Living Wage (20.4 per cent) is significantly higher compared to men (13.9 per cent). Jobs held by women account for 60 per cent of all jobs paid below the real Living Wage, 2.9 million in total. 

  • Part-time workers (33.2%) are more likely to earn below the Living Wage than full-time workers (11.0%) 

  • Low pay disproportionately affects workers from racialised groups.1 These workers (19.4%) are more likely to earn below the real Living than white workers (16.3%) 

The hospitality sector (‘Accommodation and food services’) had the highest proportion of jobs paid below the Living Wage in April 2021 (69.7%), followed by ‘Arts, entertainment and recreation’ (34.8%), and ‘Wholesale and retail trade’ and ‘Administrative and support services’ (29.0% respectively).  

In addition, workers in Northern Ireland (21.3%) were most likely to be paid below the Living Wage, followed by the East Midlands (20.2%), the North East (19.6%), the West Midlands (19.3%) and Yorkshire and the Humber (18.5%). 

When it comes to Local Authority, Bexley in London has the highest proportion of below Living Wage jobs across the country (40.7%) – this was also the case last year. As shown in Table 1, London stands out as having a high number of below Living Wage ‘hotspots’, with 9 of the 25 (36 per cent) most affected areas being in the capital, including 4 of the top five most impacted areas. This is despite London as a whole having a similar proportion of below Living Wage jobs as the UK as a whole (17.2 per cent and 17.1 per cent respectively).  

Katherine Chapman, Director of the Living Wage Foundation, said:
 “This year we celebrate 20 years of the Living Wage movement and celebrate the huge impact the campaign for a real Living Wage has had a huge impact in tackling in-work poverty. Over the last year we’ve seen record numbers of responsible organisations who recognise that a real Living Wage is not only good for workers and their families, but for business and society too. Because of their commitment, 300,000 workers will see their wages rise tomorrow in line with the real Living Wage.   

However, with 4.8 million workers still paid below the real Living Wage – and women and workers from racialised backgrounds disproportionately affected by poor wages –more organisations must do the right thing and commit to paying the real Living Wage. 

Today’s report also highlights that low pay and the effects of poverty disproportionality effect racialised groups. While paying a Living Wage cannot end structural racism alone, tackling low pay and pay inequality is one of the necessary steps we must take to tackle the injustices racialised groups face. I’d urge businesses who can to accredit with the Living Wage Foundation – it’s never been more important to pay a wage in line with the cost of living.”  

 

Notes to Editors:  

Living Wage Foundation Media Contacts for interviews and case studies: John Hood - john.hood@livingwage.org.uk / 07507 173649 or Tom Blin - thomas.Blin@livingwage.org.uk / 07706 217589  

Living Wage Foundation Research Contacts for questions on the data: Joe Richardson – joe.richardson@livingwage.org.uk / 07740186651 

 

Living Wage Week, from 15-21 November 2021, is a UK-wide celebration of the almost 9,000 employers that have voluntarily committed to ensure employees and sub-contracted staff earn a real Living Wage. This includes half of the FTSE 100 and major household names such as Everton FC, Aviva, Burberry, and Nationwide.   

[1] Analysis provided by Cardiff Business School (CBS). Total uplift (aggregate and year on year) for workers paid the real Living Wage is modelled according to different sectors, regional wage variations and full-time and part-time employees.   

What is the real Living Wage?   

The real Living Wage is an hourly rate of pay set independently and updated annually (not the UK government’s National Living Wage). It is calculated according to the basic cost of living in the UK, and employers choose to pay the Living Wage on a voluntary basis. According to the Living Wage Foundation, since 2011 the campaign has impacted over 300,000 employees and delivered over £1.6bn extra to some of the lowest paid workers in the UK.   

About the Living Wage Foundation   

The Living Wage Foundation is the institution at the heart of the independent movement of businesses, organisations and people who believe that a hard day’s work should mean a fair day’s pay. We recognise and celebrate the leadership shown by the nearly 9,000 Living Wage Employers across the UK who voluntarily commit to ensure their staff earn a real Living Wage that meets the cost of living. We are an initiative of Citizens UK.    

Only the real Living Wage is calculated according to the cost of living in the UK and in London. Employers choose to pay this wage on a voluntary basis. The real Living Wage applies to all workers over 18 – in recognition that young people face the same living costs as everyone else. It enjoys cross party support.    

Read the full report

Read the tenth annual update on employee jobs paid below the Living Wage and the second produced by Living Wage Foundation. 

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14th November 2021
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