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Jobs paying below ‘real living wage’ fall to seven-year low

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Jobs paying below ‘real living wage’ fall to seven-year low
A waitress clears a table at a restaurant in central London, on July 25, 2014. Britain's economy grew strongly in the second quarter, overtaking the size it achieved before the global financial crisis, data showed on Friday in the latest sign of robust recovery. AFP PHOTO / CARL COURT (Photo credit should read CARL COURT/AFP via Getty Images)

The proportion of jobs that pay below the so-called real living wage has fallen to a seven-year low, analysis by professional services firm KPMG showed today.

Read more: Sajid Javid promises to increase national living wage to £10.50

This year, 19 per cent of UK jobs paid below the voluntary rate of £9.00 per hour and £10.55 in London, down from 22 per cent in 2018. The fall means over 550,000 fewer jobs pay less than the real living wage.

However, KPMG’s report said there is “still a long way to go” for part-time workers. Around 38 per cent of part-time jobs earn less than the real living wage, compared to just 12 per cent for full-time workers.

There is also a big gap between men and women. A quarter of women earn less than the real living wage, compared to only 15 per cent of men.

KPMG vice chair James Stewart said: “We must ensure that part time workers are not left behind – as these figures show well over a third are not benefiting from the real Living Wage. There are also far too many women who are not benefiting.”

He praised the real living wage, calling it “an effective driver” of productivity, something the UK has struggled to improve. “What’s good for our workers is good for business too and there is a real opportunity for many to look at the remuneration of their staff in terms of overall benefit to their business as well as the bottom-line.”

Chancellor Sajid Javid has pledged to markedly increase the legal minimum wage, which is different to the voluntary real living wage, which should lift more people out of low pay. Last month he promised to increase the legal minimum wage to around £10.50 by 2024 for over-25s.

Some opponents of higher mandatory wages have said they increase unemployment as companies cut back on hiring to save money. Yet an independent review published today concluded that “minimum wages in a range of countries have had a negligible or zero effect on jobs, but significantly increased the earnings of the lowest paid”.

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Professor Arindrajit Dube, the report’s author, said: “There is room for exploring a higher ‘national living wage’ in the UK up to two-thirds of the median wage.”

(Image credit: Getty)