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One in five earn below Living Wage

Employers have been urged to introduce a “Living Wage” after figures have showed 4.82m people in the UK are paid less than it costs to live.

Despite recent announcements that the country has risen out of recession, over one in four people told accountants KPMG that their finances are in a worse state now than they were just one month ago.

Companies have been encouraged to raise wages to the Living Wage to decrease absenteeism and improve employee retention, as well as to incorporate an ethos of social responsibility.

Research carried out by KPMG showed that one in five workers are paid less than the Living Wage, and the hardest hit areas are around London, the North West and the South East.

The Living Wage is calculated using basic living costs in different areas around the UK, which currently stands at £8.30 in London, and £7.20 outside the capital, whilst minimum wage remains lower than this at £6.19.Bar workers are the worst affected, with 90% of staff earning under the living wage, while 85% of waiters do not earn the basic cost of living.

People’s general outlook does not seem to be improving, and KPMG found that 47% thought their personal finances would be worse in a years time, and nearly 25% thought their job security had worsened.

Rhys Moore, director of the Living Wage Foundation, said: “Paying a Living Wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country.

“It is really encouraging to see nearly 100 organisations now signed up and accredited. But that still leaves many more organisations that aren’t.

“We hope that Living Wage Week will create real momentum and that many more employers will sign up.”

Marianne Fallon, Head of Corporate Affairs at KPMG, said: “Paying a Living Wage makes a huge difference to the individuals and their families and yet does not actually cost an employer much more.

“At KPMG, we have found that the improved motivation and performance, and the lower leaver and absentee rate amongst staff in receipt of a Living Wage means that the cost is offset and paying it is the right thing for our business.

“We think it is the responsible thing to do. Tackling in-work poverty is also vital if we are to enable more people to improve their life prospects and increase social mobility in this country.”

This was posted in Bdaily's Members' News section by Miranda Dobson .