The Real Living Wage as Civil Regulation: An Assessment

In this policy briefing, Cardiff Business School uses the Living Wage movement as an example of civil regulation to understand its value in addressing issues like in-work poverty. By ‘civil regulation’, we mean civil society organisations – such as charities, community groups, and social movements – coming together to set voluntary standards for employers to follow.  

The research draws on a database of over 20,000 Living Wage accredited employers and two surveys of accredited organisations. It aimed to test different arguments about the effectiveness of civil regulation.  

Overall, the findings show that the Living Wage movement has had a significant positive impact on low paid employees in the UK, and modest, mostly positive effects on employers. It has also worked with, rather than against, other methods of tackling workers’ rights issues such as collective bargaining, and has used ‘business-friendly’ methods and partnerships across different sectors to secure wins. This suggests that civil regulation has positive potential to raise employment standards. Key findings are summarised below. 

The reach and impact of the Living Wage 

As of May 2025, there are over 16,000 accredited Living Wage Employers, which together employ more than 3.8m people. More than half a million workers have benefitted from pay increases as a result of their employers joining the scheme, with an estimated £3.85bn going back into workers’ pockets since 2011. 15 per cent of workers received an hourly pay increase of 20 per cent or more. The Living Wage has spread broadly across the country and is found in all main industry divisions and sectors.  

Almost all employers reported benefits to their business as a result of accrediting, including boosts to reputation and improved HR outcomes. In 63 per cent of cases, both employers and employees reported benefits, and employers reported more significant gains when a higher proportion of their workforce received wage increases, suggesting alignment between business and social goals. In many cases, positive business effects are modest. However, only 1-3% of employers reported negative impacts through clawing back costs, such as through cutting benefits or hours. Instead, many employers extended Living Wage benefits beyond minimum requirements, including raising pay for higher-wage staff and covering additional worker categories. 

The Living Wage reinforces other methods of regulation 

The Living Wage movement has spread since the statutory minimum wage was first introduced, and evidence suggests the Living Wage has helped encourage further progress here. As the statutory minimum wage has increased, this has also spurred the Living Wage Foundation to look at other standards through the Living Hours and Living Pension campaigns. The Living Wage has a strong presence in unionised workplaces, and trade unions have helped to spread the standard, creating a ‘shadow’ Living Wage where employers adopt the standard without formally accrediting. This has helped increase the reach and impact of the Living Wage. 

How the Living Wage has spread 

The campaign has used ‘business-friendly’ methods to recruit employers, by putting forward a clear business case, providing incentives, and encouraging champions to recruit their peers. It has also built relationships with other civil society organisations aiming to tackle in-work poverty to help grow the movement. Finally, it has partnered with local authorities who are working to reduce poverty in their local areas, which has contributed significantly to its success.