Living Wage Commission

RECOVERY MEANS UK ‘WORKING POVERTY’ CAN BE SLASHED BY 2020, SAYS COMMISSION’S FINAL REPORT

The number of people in low pay can be slashed by over 1 million by 2020 with a series of pragmatic low-cost measures building on the economic recovery, according to the final report of the independent Living Wage Commission, chaired by the Archbishop of York, Dr John Sentamu.

The report follows the most comprehensive analysis to date of low pay, conducted over 12 months by leading figures from business, trades unions, academia and civil society. It concludes that:

  • More than 1 million people can be lifted out of low pay by 2020, with no adverse economic consequences
  • The cost of increasing the pay of nearly 500,000 public sector employees would be more than met by higher tax revenues from over 600,000 private sector employees also brought into the Living Wage
  • Professional service firms, like accountancy and consultancy companies, have nearly 300,000 low-wage staff who can be paid the Living Wage by 2020, and the banking and construction industries can pay the Living Wage to 75,000 employees with an increase to their wage bills of less than 0.5%
  • Extension of the Living Wage depends on the UK governments adopting an explicit goal to increase the take-up of the Living Wage to at least 1 million more employees by 2020
  • The measures required of the government include requiring all publicly listed companies to publish the number of people paid below a Living Wage

The Commission warns that, if the government does not support the extension of coverage of the Living Wage, working families will continue to rely on help, such as food banks and unsustainable debt, to get by. Currently 5.2 million people earn less than the Living Wage and the majority of people in poverty are now in working households.

However, the Commission rejects the introduction of a compulsory Living Wage, warning that the increased wage bill would not be affordable in some sectors, such as retail and hospitality, and for some small firms.

According to the Commission, higher wages for the lowest-paid staff leads to increased productivity, reduced staff turnover and improved morale.

Quotes:

Archbishop of York, Dr John Sentamu

Dr Adam Marshall, Director of Policy and External Affairs at the British Chambers of Commerce

Frances O’Grady, General Secretary of the TUC

Working poverty

Double squeeze: higher prices, stagnating wages

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