For Living Wage Week, Maisie Caro from the Living Wage Foundation and Charlie Gibb from Business in the Community highlight the importance of a real Living Wage as the cost of living continues to climb.
Last month we celebrated Living Wage Week. Up and down the country, politicians, businesses and campaigners came together to celebrate a movement of Living Wage Employers who have voluntarily committed to pay all staff, including third-party staff like cleaners and caterers, in line with the cost of living, above and beyond what they are required to do by law.
A growing movement
With 1 in 10 UK employees now working for a Living Wage Employer, the movement for a real Living Wage has come a long way since it began among communities in East London twenty years ago. Over 11,000 employers have now committed to pay the Living Wage rates (currently set at £10.90 for UK workers and £11.95 for those in London), including over half of the FTSE 100, household names like Nationwide, IKEA and Everton Football Club, and thousands of small firms. But, as the cost-of-living crisis grips the nation, it’s clear there’s still a long way to go.
Just this week, new data from the Office for National Statistics showed inflation at a four-decade-high of 11.1%. While households across the country are facing the challenge of rising prices, there is evidence that low-paid workers are particularly struggling. In the summer, Living Wage Foundation research into the lives of people paid below the real Living Wage found that over half (56%) of low-paid workers had turned to food banks to get by, and 42% are skipping meals altogether to make ends meet.
Now more than ever, workers need a wage that reflects the cost of living. The Government recently announced that the National Living Wage (the government’s name for the legal minimum wage for over 23s) will rise to £10.42 from April 2023, which is welcome news for low-income households. However, the real Living Wage is the only UK wage rate calculated according to the cost of living.
Good for individuals, business and society
It’s not just good for workers and their families. Unsurprisingly, when workers are paid a wage that allows them to afford everyday essentials instead of scraping to get by, they feel more valued by their employer and are less likely to look for work elsewhere. Over 90% of Living Wage Employers report that paying a higher wage floor has benefitted their business, whether through more motivated staff that perform better at work to the reduced turnover rates and recruitment costs.
Research published this week by the Living Wage Foundation and Smith Institute also suggests lifting just a quarter of low paid workers onto the real Living Wage could deliver £1.7 billion to the national economy, through increased productivity, tax receipts and consumer spending. If we are to move to a high-wage, high-growth economy, it’s clear a real Living Wage is an important step on the path to getting there. Every employer that makes the commitment to pay the real Living Wage makes a difference.
Taking action now to address the cost of living
That’s why paying the real Living Wage is front and centre of Business in the Community’s Cost of Living Action plan for businesses. We know that the majority of businesses want to ensure all workers are paid fairly and are able to keep up with the cost of living, but paying the real Living Wage may feel too much of a stretch in the face of other business challenges. The Living Wage Foundation wants to help employers navigate these challenges, and can support your business at every stage to become a Living Wage employer.
Living Wage Employers change the lives of the workers they employ, and the families and communities those people go back to at the end of the day. And, they change our society for the better too. Day by day, little by little, each and every addition to the Living Wage movement helps to ensure a hard day’s work guarantees a fair day’s pay.