Some 5.28 million people are paid less than the Living Wage, according to research published by KPMG. The latest figure indicates that 22 percent of employees now earn less than the Living Wage – up from 21 percent, last year.
Although the rise sounds modest, in real terms it equates to another 147,000 people. The data also belies a worrying trend which sees part-time, female and young workers as the most likely to earn a wage that fails to provide a basic but decent standard of living.
Hospitality figures
The figures for hospitality, a major employer, show large numbers apparently earning below the Living Wage: this is likely to become a growing concern, and hospitality organisations will be encouraged to pledge to pay a Living Wage.
| – | Thousands of jobs | % paid below Living Wage |
| Bar staff | 187 | 90% |
| Waiters/waitresses | 154 | 85% |
| Kitchen and catering assistants | 456 | 80% |
| Chefs | 173 | 45% |
| Cleaning/housekeeping managers/supervisors | 43 | 40% |
| Catering and bar managers | 61 | 30% |
| Publicans/managers licensed premises | 16 | 20% |
| Restaurant/catering managers/proprietors | 44 | 20% |
| Hotel/accommodation managers/proprietors | 20 | 15% |
The research, conducted by Markit for KPMG, shows that the proportion of people earning less than £7.65 per hour (or £8.80 in London) is much higher amongst part-time workers. More than 4 in 10 (43 percent) take home less than the Living Wage, compared to 13 percent of full-time employees. Despite accounting for less than one-third of all UK jobs, there are also more part-time roles paying less than the Living Wage (2.98 million) than full-time jobs (2.29 million).Higher amongst part-time workers.
Higher amongst women
More than forty years after the first Sex Discrimination Act was passed, the research also finds that women are more likely to be paid below the Living Wage than men. This year’s data shows, for example, that 1 in 4 women earn less than the benchmark, compared to 16 percent of men. It’s a figure that has stagnated over the past 12 months. Even where wages have increased, men earning less than the Living Wage have been awarded an average 3 percent increase, compared to 2.7 percent for women.
Younger workers caught in ‘working poverty’
Although the number of young unemployed continues to fall, it is clear from analysis of the data that younger workers remain the most likely group to be caught in the ‘working poverty’ trap. 72 percent of 18-21 year olds are currently earning less than the Living Wage, compared to just 15 percent of those aged 30-39. In real terms this equates to 1,175,000 employees of traditional university age failing to earn enough to support the purchase of basic necessities.
Increased wages deliver higher retention and productivity
Mike Kelly, Head of Living Wage at KPMG, says: “Although there are almost 1,000 organisations pledged to pay a Living Wage, far too many UK employees are stuck in the spiral of low pay.
“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. Inflation may be easing, but unless wages rise we will continue to see huge swathes of people caught between the desire to contribute to society and the inability to afford to do so. 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 a Living Wage.”