One in five people are still earning less than the Living Wage a new report has found, just as the wage rate increased today (November 6) to £10.20 in London and £8.75 in the rest of the UK.
The Living Wage, calculated each year by the Living Wage Foundation, is a voluntary rate that’s set based on the minimum needed to maintain a basic quality of life.
This year’s jump was significant, up 3.6 per cent in the wider UK and 4.6 per cent in London, which reflected rising inflation amid Brexit uncertainty.
The new Living Wage is now even further removed from the government’s statutory minimum wage – falsely rebranded as the National Living Wage – which stands at £7.50 an hour, and only for those 25 and older. Statutory minimums for younger people are even lower.
A KPMG report out last week found that about 5.5m people are struggling to meet basic expenses earning below the Living Wage.
For certain groups of workers, the problem is even more pervasive – 3.4m women, for example, earn less than the Living Wage, compared to 2.1m men.
Scandalously, the vast majority of workers in hospitality do not earn enough to maintain a basic standard of living, with 86 per cent of bar staff and 83 per cent of waiters earning less than the Living Wage.
A majority of people aged between 18 and 21 also earn below the Living Wage.
A light was shed on the lived experience of those not earning enough to meet basic expenses after a Living Wage Foundation survey, which found that more than a third of low-wage earners used a credit card or loan to top up their monthly income.
More than half were forced to say no to a social invitation in the last month because they could not afford it. And just over half also reported borrowing money from friends or family in the last month.
Today’s hike in the Living Wage will translate into a pay rise for the roughly 150,000 workers whose bosses have voluntary signed up to commit to paying them decently.
Heathrow Airport today (November 6) announced it would join the list of more than 3,600 Living Wage Foundation’s accredited Living Wage employers, making it the first ever UK airport to pay the Living Wage to all of its workers.
Last week, Liverpool FC joined the only two other Premier League clubs, Everton and Chelsea FC, who pay their workers the Living Wage. Liverpool moreover committed to paying all staff – even if they are not directly employed by the Club, such as match day casuals – £8.45 from June next year.
Still, some companies have publicly committed to paying the Living Wage while never actually following through on their commitments.
InterContinental Hotel Group (IHG), parent company of big hotel chains such as Holiday Inn, pledged to pay the London Living Wage to its entire staff within five years in 2012.
The hotel group’s commitment occurred after it won an Olympic contract and was inundated by criticism from Unite and others over the poverty pay of its workers.
But five years on, many workers are still being paid below the London Living Wage, with for example, many housekeepers who are contracted out from a third-party being paid only the statutory minimum.
London mayor Sadiq Khan has written a letter to IHG expressing concerns over its failure to phase in the Living Wage, while Unite will be staging a protest at an IHG hotel in London on Friday (November 10) urging the group to honour its commitments.
Unite will be staging another protest on Wednesday (November 8) at a Whitbread-owned hotel in London over its failure to pay the Living Wage as well. In September, Whitbread pulled out of the Ethical Trading Initiative (ETI) – one of the core codes of the initiative is paying workers a living wage.
The union is also urging people to sign a Tourism Concern survey demanding that the hospitality sector pay and treat its workers decently.
Unite assistant general secretary Steve Turner said of the latest Living Wage hike, “While it is a welcome sign that the Living Wage is gaining traction among more and more employers, our job in dismantling low-pay Britain is far from over.
“With over five million women and men still earning well below even the previous Living Wage and the ta payer continuing to subsidise low pay for profitable employers through tax credits and housing benefits, we should keep in mind that not all employers are committed to a fair day’s pay for a fair day’s work,” he added.
“This is why we as a union are calling for a statutory minimum wage of at least £10 an hour across the board, which our research has shown is entirely affordable, and the return of sector level collective bargaining,” Turner explained.
“We cannot depend on the largesse of a handful of employers to deliver us from the evil that is deliberately depressed, poverty-pay for millions while those at the top pocket millions in salaries, bonuses and share options as they squirrel away their wealth in tax havens, avoiding paying their fair share back to the society that’s created their success.”
Don’t forget to sign the Tourism Concern survey here and demand that the hotel industry pay their workers the Living Wage. Stay tuned on UNITElive for more on this week’s hotel protests.