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29 October 2012

One in five workers paid less than the living wage: five questions answered

Bar staff, waiters, retail assistants.

By Heidi Vella

A new report from KPMG has revealed nearly five million people receive less than the recommended living wage. We answer five questions on this latest report.

What is the Living Wage?

It’s a rate established as a recommended minimum wage for a basic standard of living and is roughly £1 more than the national minimum wage. In London the recommended Living Wage is £8.30 an hour and in the rest of the UK it’s £7.20.

Why are nearly £5 million people paid less than the recommended Living Wage?

The rate is voluntary unlike the national minimum wage (£6.19 for those over 21) which is law, so employees can request the rate but there is nothing to make an employee pay it.

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In what industries do many of these five million people work?

The report says 90 per cent of bar staff and 85 per cent of waiters and waitresses do not get the minimum recommended Living Wage and around 780,000 sales and retail assistants are also missing out.

What areas are the worst affected?

According to the report Northern Ireland has the highest proportion of people earning below the Living Wage with 24% of workers receiving less, followed by Wales at with 23%, with London and the South East of England the lowest, both at 16%.In terms of total numbers, London, the North West of England and the South East of England had the most.

What do the officials say?

Frances O’Grady, the incoming general secretary of the Trade Union Congress (TUC), told the BBC: “It is shocking that in this day and age, one in five workers is still earning less than is needed to maintain a decent standard of living.

“The living wage is not a luxury, and means that low-paid workers do not have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children.

“Many more employers could afford to adopt the living wage, and we hope that many more decide to pay it in the coming months. Now more than ever is the time for employers to put an end to poverty pay.”