Living Wage Foundation will reveal new real living wage rate on 6th November. This new rate is expected to be implemented by the end of financial year.
One in five employees in the UK earn below the real living wage, according to a 2017 Living wage report for KPMG. Nearly 66 per cent of employees between the age of 18 and 21 earn below this threshold- making it difficult to afford day-to-day needs.
The gap between national minimum wage and the London Living wage is fairly huge. Currently, employers pay £9.75 per hour to their employees who are over 18, under the London Living wage, whereas companies that abide by the national minimum wage pay £7.50 per hour to those over 25.
According to statistics, over 150 000 employees have received a pay rise as a result of London Living wage- dragging them out of in-work poverty.
Last year, the mayor of London, Sadiq Khan, increased the London Living Wage by 3.7 per cent from £9.40 – meaning a full-time worker would get paid £95 a week more than on the government minimum.
The London Living Wage was set up in 2011 alongside the UK Living Wage by charity the Living Wage Foundation. The rate set by this foundation is paid voluntarily by over 3,500 UK businesses- including big companies like Google, ITV, IKEA, Everton FC, Chelsea FC and Oliver Bonas.
With London being one of the top 10 expensive cities in Europe, the cost of living and the recent rise in bank interest rates has left many young people worried. Moreover the rise in interest rates will make it difficult for young people to own property, but the London living wage is expected to rise above £10 – which could bring a breath of relief to many people.
The pay rise is not just advantageous to employees but employers as well. They can expect to see higher productivity, morale and rise in service standards from their employees.
Katherine Chapman, director of Living Wage Foundation, told the Guardian: “This is the sad reality of life for people who are in working poverty in the UK.”
“We’ve seen increasing use of food banks and other worrying trends. That’s why it’s more important than ever that employers are showing leadership and standing up and making a public commitment to paying the living wage.”
In a report by The Guardian, director of KPMG UK said: “In the past, many businesses were worried that increased wages would hit their bottom line, but there is ample evidence to suggest otherwise.”
Words: Bishakha Dutta | Subbing: Ainaa Mashrique