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Progress on the real Living Wage takes a regrettable step back

Jenny Baskerville
negotiating a pay rise

Undoing the progress made last year, over a fifth (22 percent) of UK jobs currently pay below the real Living Wage*, which represents an increase of 1.2 million jobs since 2012, KPMG analysis reveals. Contributor Jenny Baskerville, Director of Social Equality – KPMG UK.

Last year’s report saw the number of jobs paying below the Living Wage slightly down on the preceding year, hinting at some progress. However, the latest analysis conducted by IHS Markit for KPMG finds that the proportion of jobs paying less than the Living Wage now stands at 22 percent (up from 21 percent in 2017).

A closer look at the findings reveals that part-time workers are more than three times as likely to be paid below the Living Wage, with 43 percent below the threshold compared to only 13 percent of full-time workers.

The analysis also reveals that nearly seven in ten workers aged between 18 and 21 earned below the threshold, compared to the lowest proportion of only 15 percent among those aged 40 – 49. The prevalence of in-work poverty increased again once approaching retirement age, with a quarter (25 percent) of those 60+ facing in-work poverty.

At the same time, there continues to be regional disparity across the UK, with Northern Ireland and the East Midlands having the highest proportion of jobs paying below the Living Wage, at 26 percent in each. By contrast, the South East has the lowest proportion, at only 18 percent. The real Living Wage rate nationally currently stands at £8.75, whilst in London it is £10.20.

Looking to gender equality, the proportion of female employees earning less than the real Living Wage (27 percent) continues to exceed that for males (17 percent). This means that nearly 60 percent more women were paid below the real Living Wage, compared to men. Furthermore, in every age category, the proportion of females earning less than the threshold exceeded the percentage of males, with the greatest gap noted among those 50 – 59 years of age.

Commenting on the findings, Jenny Baskerville, director of social equality at KPMG UK, said: “The latest real Living Wage analysis makes for very dire reading on all counts. While some progress was made last year, it’s clear that it has retreated and left more facing in-work poverty as a result, especially if you’re a part-time worker, under the age of 21 or over 60, female, living outside the South East, or any combination of these. In fact, the number of jobs paying below the real Living Wage has actually increased by 1.2million since 2012, hammering home the magnitude of this problem.

“It’s critical that we reward and value those making a contribution to our society and economy, and clearly such a sizeable challenge requires a collective approach. For businesses though, it’s vital to look beyond the bottom line, and instead focus on non-monetary aspects that the real Living Wage can bring, like improved staff morale, rising service standards or increased productivity.”

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