6 million jobs failing to pay the ‘real’ living wage despite incentives

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The level of workers that are receiving the ‘real’ living wage has increased. The number of jobs that are failing to pay employees the living wage has risen to more than six million. Research done by The Office for National Statistics shows that approximately 3 million full time and 3.3 million part-time jobs are paying their workers less than people need to meet the costs of living.

The Acting Chief Economist at CIPD Ian Brinkley, questioned whether the work that is available in the UK was actually of a high quality. This question was raised due to the underpaid, low-hours or insecure nature of current work. However, this is surprising as the UK is close to a record low in terms of unemployment.

In 2016, the UK government introduced a rebrand of the minimum wage, changing it to the living wage. The figure is currently £7.38 per hour for under 25s and for those who are over 25 the wage is £7.83 per hour. However, more than 4,000 employers have decided to pay higher rates to their employees. This commitment from certain employers is run in conjunction with The Living Wage Foundation. The advantages of paying the ‘real’ living wage can be that it improves the brand, whilst also increasing the motivation and retention of staff.

An application based bank called Monzo has stated that they do pay the ‘real’ living wage and because of this they argue that the customer service given is of a higher standard due to the fact that staff feel valued and cared for. The bank states that implementing the living wage helped them to benchmark how other salaries within the company would be amended e.g. pay rises, and also improved the long-term image and reputation of the company.

Maria Campbell stated that “it’s hard to persuade someone that you care about them and their wellbeing and career goals if you’re going to pay them the absolute minimum that you legally can. If you make the effort to invest in your team, and show them that you actually care, you’ll find they work harder, perform better, and are more invested in their work”.

In addition, in the budget announcement made by Philip Hammond on Monday 19th October, the chancellor announced a plan of action to increase the national living wage by 4.9%. This would see workers over 25 paid £8.21 an hour instead of £7.83. The date that this plan will be implemented is in April 2019.

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