One-fifth of UK employees earn less than living wage, finds research
Women and young people are most likely to be earning less than the living wage in the UK, according to a report from the Resolution Foundation.
The think-tank found that in 2012, the total number of people earning less than the living wage had risen to 4.8 million, equivalent to a fifth of the UK workforce. One in four female employees (or 2.9 million) earned less than the living wage, as did three-quarters of employees below the age of 20.
The living wage measure in London was £8.30 in 2012 and £7.20 elsewhere in the UK, and was calculated by academics at the Centre for Research in Social Policy.
Employers are not compelled to pay living wage rates in the same way that they must pay at least the national minimum wage of £6.19 to workers aged over 21.
The Resolution Foundation also identified a huge tranche of people on ‘low pay’, which means that they earn less than two-thirds of the median hourly rate (or less than £7.44). Using this definition, 5.1m of all employees, or 21 per cent, were low paid.
Hoteliers and restaurants were most likely to offer low hourly rates, with 68 per cent of workers in this sector defined as low paid. Retail and wholesale roles also tended to be low paid, with 1.5 million staff in these jobs earning less than £7.44 an hour.
Regionally, those outside London and the south-east were the lowest earners, with only one in ten London-based workers defined as low paid, compared with 25 per cent in other parts of Britain.
The report also highlighted how salaries were struggling to keep pace with the rising cost of living, with annual median salaries in 2012 at £21,300 – some £3,300 lower than their pre-recession peak, once adjusted for inflation.
Separate research released this week by trade union body the TUC echoed these findings. It found that, in the last five years, average pay has fallen by 6.3 per cent in real terms – the equivalent of £30.30 for someone working a 40-hour week.
The TUC also found regional differences in the squeeze on UK workers’ incomes, with the north-west the hardest hit region in the UK. Here, full-time workers take home £36.41 less per week in real terms than in 2007.
TUC general secretary Frances O’Grady said: “Workers’ real hourly pay rates have taken a hit over the past five years because wages have failed to keep up with inflation. But this fall is also a result of the worrying increase in insecure and short-hours employment.
“And in many cases when people have lost their jobs, and are fortunate enough to find work, they are forced to take jobs with fewer hours and on lower rates of pay. This is not the way to build a strong economy – the UK needs far more better jobs on much better rates of pay.”
The TUC’s annual conference next week will focus on its campaign for better pay, she added, urging “those employers who can afford to pay a living wage to start doing so”.