The new Living Wage rate for the UK has been announced today at an event in York hosted by the Joseph Rowntree Foundation (JRF).
The Living Wage (outside London) will be £7.85 per hour
This is a 20p increase on last year and higher than the £6.50 National Minimum Wage.
The rate is based on JRF’s Minimum Income Standard research, which considers what income is needed to provide an adequate standard of living. The Living Wage is paid voluntarily, with organisations accredited by the Living Wage Foundation (LFF). The Living Wage enjoys cross-party support and public backing from the Prime Minister and Leader of the Opposition.
The announcement was made by Nestlé, the York-based employer and the first major manufacturer to receive accreditation as a Living Wage employer in the UK. This accreditation covers approximately 8,000 employees across Nestlé UK and its sister companies. The company is now working with contractors to ensure that their employees working across Nestlé sites will also be paid the UK Living Wage by December 2017.
The new rate is announced after data showing the extent of low pay in the UK: LWF figures show 5.2 million people are paid less than the Living Wage. In the Yorkshire & Humber region, 25% of workers are on less than the Living Wage – approximately 481,000 people. At the event in York, JRF, Nestle and City of York Council (CYC) urged businesses who could afford the Living Wage to pay it to their staff.
Julia Unwin, Chief Executive at JRF and JRHT, said:
“With the economy recovering from a deep and damaging recession, our research shows higher pay is vital to helping low-earning workers make ends meet. The Living Wage – which recognises the cost of essentials in how it is calculated from JRF research – is an important part of the answer. We will never achieve our full economic potential until we address the high levels of poverty across the UK, so paying a Living Wage is an important first step to getting to grips with the country’s in-work poverty problems. As an employer providing housing and care services who pays the Living Wage, we would urge all employers who can afford it to consider paying the rate – a decision which is good for individuals, businesses and society.”
Rhys Moore, Director of LWF, said:
“As the recovery continues it’s vital that the proceeds of growth are properly shared. The number of accredited Living Wage employers has more than doubled this year – over 1,000 employers across the UK have signed up. In the last 12 months the number of Living Wage employers in the FSTE 100 has risen from four to 18.
Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process.
The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”