Almost 20% of the UK workforce, including 500,000 local
government workers, are paid less than the Living Wage.
The forecast comes as the Living Wage rate is due to be increased later today. It is currently set at £7.45 an hour and £8.55 an hour in London.
It is considered to be the amount needed for an individual to be able to live decently without relying on benefits and compares to the National Minimum Wage of £6.31 an hour.
The Labour leader Ed Miliband yesterday announced that a future Labour government would provide financial incentives for companies to pay the Living Wage to all their staff.
A study released this morning by the National Union of Students found more than half of UK universities pay some of their staff less than the living wage, while more than a quarter have more than 100 staff paid less than the living wage.
Howard Reed, director of Landman Economics, calculates that the economy would gain tens of thousands of jobs rather than lose the 160,000 that the Coalition government claims.
In the study, commissioned by UNISON, Howard Reed used figures from the International Monetary Fund, rather than UK government statistics, to conclude a positive boost to the economy through the Living Wage.
Calculations based on the IMF’s predicted increase in tax returns to the UK Treasury from a universal Living Wage and the fall in the cost of benefits suggest the policy could increase GDP by between £5.6bn and £10.7bn.
Howard Reed said: “This research report shows that using reasonable assumptions about the structure of the labour market and the current scope for economic stimulus in the UK economy, it is quite plausible that adopting the Living Wage on a statutory basis could actually increase overall employment in the UK.
“Aggregate job gains are the most likely outcome of a statutory living wage.”
Campaigners say 80% of employers believe the Living Wage has enhanced the quality of the work of their staff.
UNISON general secretary, Dave Prentis, said: “With 4.8 million people earning less than the Living Wage, we need a solution that fits the size of the problem.
“Paying the Living Wage is the right thing to do and is a win-win scenario.
“Why should taxpayers be subsiding Scrooge employers who pay poverty wages and rely on the state to make up the difference?
“Poverty wages put stress and misery on families. All too often parents do not get to spend time withtheir children because they are working two jobs.
“Low paid workers worry every day about how they are going to put food ion the table and keep warm in winter. A Living Wage would put a stop to people falling into the hands of unscrupulous payday lenders, struggling to pay off exorbitant interest rates.”
Unions say recent rises in the cost of living have eroded the value of the statutory national minimum wage leaving millions of people working for poverty pay, struggling to make ends meet.
Almost 20% of the workforce, including 502,000 local government workers, are paid less than the Living Wage.
Unions say they have had a degree of success in negotiating living wage agreements with a growing number of employers.
However today’s increase to the Living Wage rate comes just days after three university unions staged a national strike over the erosion of wage levels by 13% since 2008.
They say the NUS study of pay rates across higher education shows the gap between senior university administrators and the lowest paid workers is 15:1 – one of the widest in the public sector.
UCU general secretary, Sally Hunt, said: “Staff in our universities have suffered real-terms pay cuts year after year, while those at the top have continued to enjoy rises. This report exposes the unfairness of pay rises for vice-chancellors when some staff are not even paid the living wage.
“We hope the employers’ representatives will take note of this report and understand the anger staff feel at the pay injustices in higher education. Nobody wants to see further disruption in our universities and we hope the employers will come back to the table to deal with the problem.”
Other unions are also campaigning for the statutory minimum wage to be raised to the living wage rate, making it legally enforceable on all employers.
RMT general secretary Bob Crow said: “Offering employers a tax break to try and drag them into paying a decent rate just smacks of corporate welfare and will stick in the throats of millions of people who have had their benefits cuts and frozen.
“The fact is that most companies paying poverty rates are rolling in cash.
“An example is government favourites Mitie, where RMT members will strike again this week for the living wage on their FIrst Great Western contract.
“Mitie’s boardroom is awash with cash and it is pure greed that stops these companies doing the right thing.”
You can watch our film report on last week’s universities strike here:
The joint unions campaign will also feature in this week’s special edition of The Active Voice podcast, which goes online later today.
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