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Living Wage Week and the importance of tackling low pay

It is just over one year ago that we received our accreditation as a Living Wage Friendly Funder, having become a Living Wage Employer a few years earlier. We’ve joined more than 3,600 businesses across the UK that pay their staff the Living Wage to ensure a decent and healthy standard of living. For this reason we are more than happy to celebrate this year’s Living Wage Week.

The Living Wage is a voluntary wage applicable to everybody above the age of 18 and is calculated according to the minimum cost of living. Therefore, the Living Wage distinguishes between London and the rest of the UK to account for regional differences in living costs – something the National Living Wage does not. In London, the Living Wage is currently set at £10.20 while it is £8.75 for the rest of the UK – a wage rise of 4.6% and 3.6% respectively from the previous year. The Real Living Wage is different from the National Living Wage, which is a statutory wage for over 25-year olds set at 55% of medium earning across the UK.

For the past year, the Living Wage has been at the heart of our day-to-day business. We are committed to paying all employees a wage that aligns with the minimum cost of living. As a Friendly Funder we also support charities to pay their employees the real Living Wage  The significance of this has become even more relevant as it was recently revealed that 26% of charity workers earn less than the real living wage, higher than the UK average. Sadly, this number jumps to just over three quarters for those working for smaller charities – the majority of all low-paid employees. Breaking this down by gender, 30% of women in the charity sector earn less than the living wage compared with 21% of men. Considering the charity sector workforce is made up of 65% women, 73% of those earning below the living wage in the charity sector are women.

Low pay in the charity sector is not acceptable. This is why we call on others to follow suit and become Living Wage Friendly Funders – to ensure all those organisations who would like but are unable to pay the living wage are able to do so. This is particularly evident in London, with soaring housing prices, growing inflation and a high cost of living. Paying staff adequately is essential.

Although great progress has been made regarding low pay, much remains to do. The Resolution Foundation has published new data in October 2017 indicating that low pay in Britain has decreased from 20.7% in 2015 to 19.3% in 2016. The think tank projects that low pay will reduce further to 16.2% in 2020.

Nonetheless, the rise in in-work poverty is alarming. Both ethnic and gender pay gaps are growing. Food banks across our country are unable to meet demand, overcrowding is increasing and one in five employees across the UK still earns less than the Living Wage. For the sixth largest economy worldwide this is unacceptable and deeply disquieting. We cannot accept families and young people to live at the margins of our society without the basics such as affordable accommodation and sufficient food. Cuts in vital benefits exacerbate this dire situation. More than one third of those earning less than the Living Wage had to resort to credit card loans to top up their monthly income, more than half have borrowed money from friends or relatives while nearly 55% have declined a social invitation due to insufficient funds as a recent poll for the Living Wage Foundation demonstrates. This creates a vicious circle of debt, strained social relations and a constant worry about whether one can afford basic goods.

Therefore, it is important that we do not stop now but continue with our efforts for fairly paid work for everyone. More employers need to pay their staff the living wage both in the private as well as voluntary sector. With in-work poverty on the rise, it is crucial that people in work are able to afford a decent standard of living. The Living Wage Week is an important spotlight on the issues facing Londoners and the UK. 

Published on 10 November 2017

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