Pay more people a living wage, urges report

Jo Faragher

A report by the Living Wage Commission has urged the government to slash the number of low paid workers by 2020.

The Commission, led by the Archbishop of York Dr John Sentamu, says more action is needed because the “majority of people in poverty in the UK are working”.

The Living Wage Commission is an independent body that recommends workers be paid no less than an hourly rate of income calculated according to a basic cost of living in the UK – one that would give them a basic but socially acceptable standard of living.  

This currently stands at £7.65 an hour, while in London it is set at a higher rate of £8.80 per hour. This is more than the current legal National Minimum wage, which is £6.31.

In March, it was confirmed that the national minimum wage would increase to £6.50 from October this year — the first minimum wage rise in six years to be higher than inflation.

Last week, however, the Government asked the Low Pay Commission (LPC), to look again at whether this increase will be sustainable.

Mike Kelly, director and Head of Living Wage at professional services firm KPMG, argued that UK businesses have a duty and responsibility to use the Living Wage Commission’s proposed blueprint to help lift one million UK citizens out of low pay.

He said: “The Living Wage Commission’s report provides a clear direction for business and government to work together so that the trap of ‘working poverty’ can be broken.  More than five million people are struggling to make ends meet, caught between holding down a job yet not being paid enough to live on.  It’s time that businesses put an end to this problem and take responsibility to ensure that staff and suppliers receive a fair wage.”

Research conducted by Censuswide for KPMG recently revealed that just 8% of people think economic recovery is still fragile to justify wage increases for the lowest paid.  Almost three-quarters (70%) also think the lowest paid should be the first to benefit, once employers examine their wage structures.

Kelly added: “Organisations that can afford to should offer staff and suppliers a wage that is enough to live on. Doing so affords people the opportunity to improve their work-life balance as they are not forced to work longer hours or hold down more than one job.”

Another survey by KPMG earlier this month found that four out of 10 people would shop elsewhere if they discovered that their preferred store or supplier did not pay the Living Wage.