Cost-of-living crisis | Number of jobs paid below real Living Wage rises for first time since 2020

Number of jobs paid below real Living Wage rises for first time since 2020

New analysis of the latest Annual Survey of Hours and Earnings from the Office for National Statistics (ONS), by the Living Wage Foundation, reveals that the number of low paid jobs has risen for the first time since 2020, with 3.7 million UK jobs, or one in eight, paid below the real Living Wage in April 2023, 200,000 more than a year earlier.

The hospitality sector has the highest rate of low paid jobs, with nearly half (48.1%) of all jobs in the sector paid below the real Living Wage. This is roughly twice as high as the next two sectors with the highest rate of low pay; ‘arts, entertainment and recreation’ (24.7%) and ‘retail and wholesale’ (23.2%). Hospitality has been the sector with the highest level of low paid jobs for 12 years running.  

Recent Living Wage Foundation research shows hospitality businesses could benefit from paying staff the real Living Wage, with 66% of Londoners polled saying they would be more likely to choose such venues and 60% willing to pay more for them. 

The region with the highest rate of low paid jobs is the North East (15.9%), closely followed by East Midlands (15.7%) and Northern Ireland (15.6%).

The ten local authorities with the highest levels of low pay are: Haringey (32.7%), Brent (29.5%), Waltham Forest (28.8%), Bexley (28.5%), Redbridge (28.2%), Hyndburn (26.3%), Harrow (26.1%), Mansfield (25.3%), East Lindsey (25.0%), and Thanet (24.7%). 

The level of low paid jobs in the UK was lower than expected in 2023 due to higher-than-expected levels of nominal wage growth and sharp increases to the National Living Wage. 

Recent research published by the Living Wage Foundation found that despite easing inflation, the cost-of-living crisis is far from over for low paid workers. 39% of those earning less than the real Living Wage report regularly skipping meals for financial reasons during the year to August 2023. 32% have been unable to heat their homes and 27% have fallen behind on their rent or mortgage payments. 52% said that earning less than the real Living Wage during the cost-of-living crisis has negatively impacted their mental health. 

The real Living Wage is the only wage rate calculated based on what people need to live on. It currently stands at £12.00 (UK) and £13.15 (London). For a full-time worker, that represents £3,081 more than someone earning the government’s National Living Wage. A worker on the London Living Wage would be £5,323.50 better off than someone on the National Living Wage.   

In the past two years record numbers of employers have signed up to pay the real Living Wage, including to their third-party contractors like cleaners and security guards, with 1 in 9 employees now working for an accredited Living Wage Employer. Over 14,000 UK businesses are accredited with the Living Wage Foundation, including Aviva, Everton FC and LUSH, as well as thousands of small-to-medium sized businesses. Over 460,000 UK workers receive an annual pay rise to the real Living Wage rates because of their commitment to always paying the real Living Wage. 

Over 130 accredited Living Hours employers, including abrdn, Aviva, and West Brom Building Society, go beyond payment of the real Living Wage to also provide a guaranteed minimum of 16 hours work a week, a month’s notice of shift patterns and a contract that reflects hours worked.

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Nearly 30 employers, including Aviva, Wealthify, Phoenix and Herbert Smith Freehills are leading the way in tackling low pension saving amongst their workers through Living Pension accreditation. 

Katherine Chapman, Living Wage Foundation Director, said: “The campaign for a real Living Wage has had a huge impact tackling in-work poverty, with over 460,000 workers now receiving an annual pay rise thanks to the commitment of 14,000 accredited Living Wage employers. However, today’s findings show there is more to do with 3.7 million workers not earning a wage in line with the cost of living.  

"With the cost-of-living crisis far from over, earning a real Living Wage has never been more important. Employers who want to do the right thing and protect their staff from rising prices can do so, by joining the 14,0000 Living Wage employers who are committed to always paying a wage in line with the cost of living.”  

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