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Increase to the ‘real living wage’ announced

More than 210,000 workers are set to receive a pay rise after an increase to the ‘real living wage’ was announced.

What is the real living wage?

THE REAL LIVING WAGE is the only UK wage rate that is calculated by the Living Wage Foundation, and is based on what it believes people need to live in the UK; it is not to be confused with the Government’s legally required ‘National Living Wage’, which was introduced in 2016.  The real living wage is higher than the legal national living wage and is paid voluntarily by UK businesses. To date, nearly 6,000 businesses are doing so.

The movement began in 2001, at a meeting in East London, when the grassroots organisation, Citizens UK, brought local institutions together to talk about the issues affecting their communities. Low pay was a constantly brought for discussion. At the time the government’s minimum wage was just £3.70 an hour and, despite working several jobs, people were still struggling to make ends meet.

The campaigning began with, rallies, charity music gigs and marches called for all staff working in East London hospitals to be paid a Living Wage. Followed by local schools and big City firms. In 2004, Citizens UK persuaded the Mayor of London to help champion the Living Wage across the capital. Soon, low paid workers and community leaders were negotiating and in 2011 the real living wage movement went national.

How do the national and real living wages compare?

The real living wage will increase by 20p in London (to £10.75 an hour), and by 30p (to £9.30 an hour) across the rest of the UK. The new rates are effective from now and employers are encouraged to increase wages as soon as possible, but they have six months to do so.

What does the Living Wage Foundation say?

Living Wage Foundation director, Katherine Chapman, said:

“In this time of uncertainty, today’s new living wage rates give a boost to hundreds of thousands of UK workers. Good businesses know that the real living wage means happier, healthier and more motivated workers, and that providing workers with financial security is not only the right thing to do but has real business benefits.

“This year, for the first time, cities and towns have announced big plans to grow the number of living wage employers in their communities. We are delighted at the ambition of Cardiff and Salford to build living wage cities, with Cardiff planning to double the number of workers getting the real living wage to nearly 50,000, freeing many more families from the low pay trap. We hope to see many more towns and cities follow suit.”

I am an employer, should I sign up?

The Living Wage Foundation surveyed their business network and found:

58% said it improved relations between managers and their staff

64% said it helped to differentiate themselves from others in their industry

75% said it improved motivation and retention rates for employees

86% said it had improved the reputation of their business

Employers can sign up to become living wage-accredited, meaning they pay all their workers at least the real living wage by signing up here. Around 6,000 employers are signed up, including more than a third of companies in the FTSE 100.