UK ‘living wage’ increase to be brought forward to September
UK employers pledging to pay the voluntary ‘living wage’ are being asked to offer a bumper pay rise to match soaring prices and utility bills as inflation is expected to hit double digits in the future fall.
The Living Wage Foundation, a charity that campaigns for fair wages, said on Sunday it would present its 2022-23 living wage rate announcement from November to September as prices rose at an “unprecedented” rate over of the 20 years of the campaign. the story.
It will encourage employers to pay the new rate as soon as possible.
“Rising prices are eating away at us all, but no one is feeling the pinch more than the 4.8 million low-paid workers across the UK,” said Katherine Chapman, director of the foundation. “Never has it been more important that employers who can afford it protect those who will be hit hardest by price increases.”
More than 10,000 employers, including big companies such as Google and more than half of the FTSE 100, are now accredited with the foundation, meaning they have pledged to pay all employees and contractors in their supply chain at an hourly rate above the legal rate. minimum, and recalculated each year to reflect the daily cost of living.
The announcement could boost wages for a significant part of the UK workforce, which would help ease pressure on low-income households, but would add to the difficulties the Bank of England faces as it struggles to control inflation.
The BoE has made it clear that it believes wages are already rising at an unsustainable rate; and must now also consider whether the £15billion government support for households announced last week, which targets the most vulnerable, will add to inflationary pressures.
A Cardiff Business School study found that one in 13 employees now work for an employer offering a living wage, with 300,000 benefiting directly. The Living Wage is also often used as a benchmark by large employers, even if they do not require formal accreditation.
The rate is currently £9.90 an hour across the UK, with a rate in London of £11.05 to reflect the higher cost of living in the capital. The legal minimum, which is set by the government with the advice of the independent Low Pay Commission, rose by 6.6% to £9.50 in April.
The BoE said this month that it expects inflation to hit 10% in the fall, but the new living wage rate won’t necessarily match consumer price inflation, as it is based on a basket of goods and services chosen to represent a “minimum income standard”. ”, and also takes into account changes to the tax and benefit system.
Two-thirds of the £15bn support announced by Chancellor Rishi Sunak last week will go to the 8million households receiving benefits.
The BoE’s concern is that companies say it’s currently easier than normal to pass on higher costs to their consumers – so higher wages and government aid to households could just push up prices. price again, not leaving people better off.
Reflecting ministers’ frustration with this dynamic, the Sunday Telegraph reported that Prime Minister Boris Johnson had ordered officials to draw up proposals to name and blame petrol stations which had failed to pass on the 5p cut in fuel rights entirely to customers.