Future of Work

The level of the voluntary Living Wage has been increased to £8.45 across the UK and £9.75 in London.

Everton Football Club and the British Library were among employers announcing their commitment to pay the voluntary minimum, bringing the total number of accredited Living Wage organisations to almost 3,000.

Independently calculated each year to reflect what employees and their families actually need to meet their living costs, the Living Wage is significantly higher than the Government’s mandatory minimum wage of £7.20 an hour for those aged 25, £6.95 for 21-24 year-olds and £5.55 for 18-20 year-olds.

The increase from £8.25 to £8.40 for all workers aged over 18 represents a 2.4% hike in the UK rate, while London’s rise from £9.40 to £9.75 amounts to 3.7%.

It comes a day after a survey found that one in five workers – more than five million people – are being paid less than the Living Wage, according to new estimates.

Announcing the new rate for the capital at the British Library, mayor Sadiq Khan said it was a “badge of pride” for more than 1,000 businesses that they are signed up to pay the London Living Wage, which was “well on track” to reach £10 a hour during his time in office.

More than 60,000 workers in the capital have benefited from LLW, which has increased by a total of 17.5% since 2011, he said.

“It’s essential that hard-working Londoners, who keep this city going, are rewarded for their integral role in this success,” said Mr Khan. “Paying the London Living Wage is not just the right and moral thing to do, it makes good business sense too.”

Confirming the new UK rate at a painting and decorating firm in Airdrie, Scotland’s First Minister Nicola Sturgeon said that 20% of Scottish workers still earn less than the Living Wage.

“With low pay one of the main drivers of in-work poverty, it’s vital that employers who can pay the real Living Wage do so,” said Ms Sturgeon.

Welsh First Minister Carwyn Jones said: “The Living Wage allows people to improve their situation and enjoy their lives. But it also makes sound business sense – it boosts morale, improves productivity, innovation and, ultimately, staff retention.”

The new Living Wage rates were calculated by the Resolution Foundation thinktank, overseen by a Living Wage Commission including representatives of employers, unions and civil society. The change does not affect the official minimum wage levels, including the rate for those aged 25 and over, which is known by the Government as the National Living Wage.

Katherine Chapman, director of the Living Wage Foundation, said: “It’s more important than ever for leading employers to join the growing movement of businesses and organisations that are going further than the Government minimum and making sure their employees earn enough to cover the cost of living.

“As we kick off Living Wage Week today we are celebrating nearly 3,000 employers across the UK who lead the way on tackling low pay by paying the real Living Wage. The sheer growth of our movement shows that the Living Wage is good for people and good for business.”

Unison union general secretary Dave Prentis said: “We welcome this significant rise to the real Living Wage. This year it’s more important than ever to make a noise about low pay, and ensure people earn a wage they can really live on. Whilst the Government’s lower Living Wage is a step forward, it’s no substitute for a real Living Wage.

“The Government should put their money where their mouth is and ensure everyone is paid the real Living Wage, so we can end poverty pay in this country for good.”

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