Pay Rise on the Cards for 150,000 Workers as Living Wage Increases

Employees of the more than 3,600 firms voluntarily paying their staff the living wage will see a pay rise after the Living Wage Foundation raised the rate both in and out of London.

The current legal minimum wage is £7.05 for workers under the age of 25, and £7.50 for those over the age of 25. The government refer to this latter rate as the National Living Wage, but the Living Wage Foundation calculates the actual living wage to be higher. The LWF work out their living wage “according to what employees and their families need to live”, while the government’s NLW is “based on a target to reach 60% of median earnings by 2020”.

In 2016, the LWF calculated the living wage at £8.45, and £9.75 for those living in London. They have just increased these rates to £8.75 and £10.20 respectively.

The director of the Living Wage Foundation, Katherine Chapman, said: “The new living wage rates will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation.

It’s thanks to the leadership of over 3,600 employers across the UK who are committed to paying all their staff, including cleaners and security staff, a real living wage”

These inflation beating rises of 3.6% and 4.6% will see wages go up for at least 150,000 employees who work for the firms signed up to voluntarily pay the real living wage. This includes more than 1,000 firms who signed up in the past year alone.

However, this still leaves millions of people struggling to live on less. Chapman said: “New figures show that 5.5m people are still paid less than the real living wage.”

Only around a third of FTSE 100 companies have signed up to pay their staff the real living wage. Meanwhile, as Equality Trust executive director Dr Wand Wyporska explains, “the average pay for a FTSE 100 boss is now over 300 times that of a minimum wage worker”.

London mayor Sadiq Khan expressed his support for the work of the Living Wage Foundation and implored companies to sign up to start paying the real living wage, explaining the benefits experienced by those that had already.

He said: “I want to make sure that no one who goes to work every day should have to endure the indignity of poverty. Paying the London living wage is not only the action of a responsible organisation, but a successful one too. Many of the accredited employers I speak to tell me of the increased productivity and reduced staff turnover that they’ve experienced since signing up.”

Part of what the Living Wage Foundation does is to highlight these benefits that employers get, beyond the obvious benefits experienced by an employee who earns enough money to live. According to their research, 75% of companies signed up the pay the living wage have seen motivation staff retention rates increase, and almost 60% said that relations between staff and managers had improved.