Living Wage Week: Why Osborne’s minimum wage can take a hike

Living Wage Week 2016 runs 1 – 7 November.

Since July's budget, the Chancellor George Osborne has been keen to promote his rebranded ‘national living wage’ that will peg the legal minimum for paid work at £7.20 per hour nationwide from April 2016 (for over-25s). However, while any improvement on the current offering (£6.70 for the over 21s) is a step in the right direction, much more is needed to help the growing number of people experiencing the in-work poverty that is a defining feature of employment in today’s Britain.

How much more? This week, the Living Wage Foundation's new (real) Living Wage rates of £8.25 per hour nationally and £9.40 per hour in London (upweighted to reflect the higher cost of living in the capital) were announced. The Living Wage is a voluntary code calculated annually by the Centre for Research in Social Policy to meet the actual cost of living today.

The good news is that that there are now more than 2,000 accredited Living Wage employers across the UK who have committed to paying their staff fairly. That’s more than double the number of businesses who’d signed up this time last year.

The Living Wage is good for workers, and good for business. It puts a more decent wage in the pockets of the worst paid people and, according to Living Wage employers themselves, boosts morale and productivity:

  • Over 80% of employers paying the Living Wage said the quality of work had improved in their workplace;
  • Absenteeism from work has fallen around 25%; and
  • Two-thirds of employers report significant impact in staff recruitment and retention.

But it’s not quite time to crack open the cava just yet – there’s still a long way to go. “This rise in the Living Wage is welcome [and] it’s great to see more and more employers sign up to the living wage,” says TUC General Secretary Frances O’Grady. “But we should remember that nearly six million people still earn less than this. The government needs to do more to promote the Living Wage and ensure everyone in the public sector is paid it. Both employers and the government need to pick up the pace and get Britain on a real Living Wage.”

The Living Wage campaign was launched in 2001 by parents in East London, who were frustrated that working two minimum wage jobs left no time for family life.The Living Wage Foundation believes that work should be the surest way out of poverty.