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Six million workers 'paid less than voluntary living wage'

Published 01/11/2015

KPMG found that 23% of employees are paid less than the voluntary living wage
KPMG found that 23% of employees are paid less than the voluntary living wage

Almost six million workers are paid less than the voluntary national living wage, according to a study.

The figure represents 23% of all employees, up by 1% over the past year, the research by professional services firm KPMG found.

The report was published ahead of new figures being published on Monday for the hourly rate, which are expected to show an increase from the current £7.85 an hour and £9.15 in London.

The current figures are well above the national minimum wage and more than the new living wage of £7.20 an hour for over 25-year-olds the Government has announced will come into force next April.

KPMG said its research revealed that the proportion of workers earning less than the voluntary living wage had risen for three years in a row.

The data also showed a "worrying trend" of part-time, female and young workers being most likely to earn below the figure.

Mike Kelly, of KPMG, said: "The past year has seen some notable achievements, with 2,000 employers, including more than a quarter of the FTSE 100, now accredited by the Living Wage Foundation.

"Awareness of the issue has also increased, with more than three out of four of the general public in the know about what the living wage is.

"With the cost of living still high, the squeeze on household finances remains acute, meaning that the reality for many is that they are forced to live hand-to-mouth. The figures released today show that there is still more to be done if we are to eradicate in-work poverty.

"For some time it was easy for businesses to hide behind the argument that increased wages hit their bottom line, but there is ample evidence to suggest the opposite, in the shape of higher retention and higher productivity.

"It may not be possible for every business, but it is certainly not impossible to explore the feasibility of paying the living wage."

Shadow business secretary Angela Eagle said: "We need to see more better-paid, high-skilled jobs which pay a living wage, but these figures show that progress is slipping.

"While the Tories claim to be on the side of working people, these new figures show that the number of people being paid less than the living wage is up since last year.

"At the same time the Tories are making life harder for those on low and middle incomes as they cut tax credits and hit families with a work penalty - taking on average £1,300 out of the pockets of up to three million working families. People are working harder than ever, but will rightly feel that the Government is working against them."

A Government spokeswoman said: "Britain deserves a pay rise and from April 2016 the new national living qage will give a direct boost in wages for 2.7 million people across the country, meaning a full-time worker will earn over £4,800 more by 2020 and with up to 6 million expected to see their wages rise by 2020 as the knock-on effects are felt higher up the earnings scale.

"Treasury analysis shows that women and those based outside London and the South East will be the biggest winners when the new national living wage comes into force.

"We are determined to move to a higher wage economy and welcome any employers who choose to pay above the national living wage."

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