The number of workers paid below the living wage is expected to reach more than 5 million next year

  • According new research from the Living Wage Foundation, 3.5 million jobs in the UK are currently paid below the actual living wage, the lowest level for more than 10 years.
  • However, with wages lagging behind inflation, the Living Wage Foundation’s fForecasts say it is a ‘calm before the storm’, with an estimated 5.1 million next year.
  • The actual living wage, as established by the Living Wage Foundation, is the only wage rate based on the cost of living. It is currently £10.90 in the UK and a higher rate of £11.95 in London.
  • More 11,000 UK businesses are accredited with the Living Wage Foundation, including Aviva, Everton FC, Burberry, IKEA, LUSH and Nationwide.

A new study by the Living Wage Foundation shows that, despite the number of workers earning below the real living wage at its lowest in 10 years (3.5 million), it is a “calm before the storm” with the number of jobs paying below the real living wage forecast to rise to 5.1 million next year as wages continue to lag inflation amid the cost of living crisis.

According to the latest analysis from the Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE), 1 in 8 workers in the UK earn less than the actual living wage. This equates to 12.2% of all salaried jobs and a total of 3.5 million.

It is the biggest drop in a single year, with the number of workers earning below the real living wage falling by 4.9 percentage points since April 2021, when 4.8 million workers were paid below the living wage. According to the data, this is the lowest figure for 10 years.

However, while the statistics look positive, a new study from the Living Wage Foundation released today predicts that this drop in low-paying jobs should rebound next year, with the number of workers earning less than the real living wage now expected to climb to 5.1 million (1 in 5 jobs).

The real living wage is the only wage rate calculated according to what people need to live. It is currently £10.90 (UK) and £11.95 (London). For a full-time worker, that’s £2,730 more than someone earning the government’s national living wage. A worker collecting the London Living Wage would earn almost £5,000 better than someone collecting the National Living Wage.

Over 11,000 UK businesses are accredited with the Living Wage Foundation, including Aviva, Everton FC and LUSH, along with thousands of small and medium-sized businesses. 370,000 UK workers receive an annual pay rise at the real living wage rate as a result of their commitment to always pay the real living wage.

Katherine Chapman, director of the Living Wage Foundation, said:

“The Real Living Wage campaign has had a huge impact on the fight against in-work poverty, with over 370,000 workers now receiving an annual pay rise thanks to the commitment of 11,000 UK employers. However, while this year’s data on low-paying jobs looks positive, our forecast shows a bleak picture for next year, with around 5.1 million workers expected to be paid below the actual living wage. With the cost of living rising and families facing more pressure this winter, it’s never been more important for businesses to do the right thing and commit to paying a real living wage.

Rosie Fogden, head of research and analysis at the Center for Progressive Policy, said:

“Based on the real cost of living, the real living wage is a really important measure of how much work pays people enough to live on. We’ve seen the price of basics like bread and pasta go up by 60% over the past year and this rapidly changing economic backdrop is giving the real living wage renewed importance as businesses and local decision makers look for ways to support their communities.

In some places across the country, like Rossendale, Boston and West Devon, low-paying jobs dominate the labor market, limiting opportunities for those who live there and leaving them vulnerable to poverty while dampening regional productivity.

Paying the real living wage in these places can help ensure that the workforce benefits from the economic growth of their region. In response to the current crisis, the Center for Progressive Policy has also proposed a new locally managed business transition fund to support the transition of energy-intensive sectors to a low-carbon economy and protect employees.

Michael A. Bynum