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What is The Living Wage

What is the living wage

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The amount of money you need to earn to cover your basic costs of living is known as the Living Wage. The cost of living varies across the UK with London being the most expensive by a significant margin. For this reason, experts talk about one Living Wage for the capital and another figure that is intended to represent the Living Wage for the rest of the country. It can never be more than an approximate figure, but is believed to offer a fair assessment of the financial needs of the general population.

How does it Differ from the Minimum Wage?

The Living Wage differs from the National Minimum Wage in that it is an advisory figure only. Employers must, by law, pay at least the National Minimum Wage to their staff but are not obliged to follow the Living Wage benchmark when assessing their pay structures.

The National Minimum Wage currently stands at £6.50 per hour for those aged 21 and over, and £5.13 per hour for those aged 18-20. These figures are set annually by the Business Secretary, acting on advice from the Low Pay Commission.

By contrast, the Living Wage is significantly higher, standing at £9.15 per hour in London, and £7.85 per hour across the rest of the UK. These figures are currently calculated by Loughborough University’s Centre for Research in Social Policy.

Why the Difference?

The Living Wage is intended to reflect to amount required by individual workers to lead a decent life. The Minimum Wage is intended to offer a ‘fair’ rate of pay for work done. Clearly the two figures are some distance apart. The rising visibility of the Living Wage has helped to address this disparity, with over 1000 UK employers now accredited to the Living Wage Foundation, a move that commits them to pay their contract and sub-contract staff a minimum of the Living Wage. But there are many many more employers who still pay less than the Living Wage.

What can Workers do to Attain the Living Wage?

What is the living wageThere have been a number of high profile cases where employees have successful challenged their bosses to pay the Living Wage, and have won:

  • Those who clean the Houses of Parliament took strike action in 2005 to demand an increase in pay that would out their earnings in line with the Living Wage. They achieved their goal in 2006
  • Cleaners working for Transport for London (TFL) also turned to Industrial Action over a two year period before finally, in 2010, achieving a pay deal based on the Living Wage

Strike action is not an option for many people and in these cases only continued lobbying and publicity is likely to make any significant difference to employer attitudes. Yet if everyone did nothing the things would never change. Perhaps it is simply a concerted and organised effort that is required to bring about the changes necessary to make the Living Wage a reality for the majority.

What Next?

A special Living Wage Commission was established, led by the Archbishop of York, Dr. John Sentamu. The commission included representatives from the Trades Union Council, Chambers of Commerce, and members of the voluntary sector. Its aim was to conduct an independent inquiry into the future of the Living Wage. Among its findings were:

  • A recommendation that government aims to cut low-paid workers to a level of one million by the year 2020
  • Firms, especially in the private sector, should not be forced to pay the Living Wage, particularly if in doing so they would put other jobs at risk
  • The government should set an example by introducing the Living Wage for its own employees
  • Private companies who have the means to pay the Living Wage should be obliged to do so

It is debateable whether any of these recommendations will be followed. What is clear is that many working people in the UK are simply not being paid enough to afford to live. Until this is rectified workers are not incentivised to take low-paid jobs, and there will remain a necessity to turn to tax credits and benefits in order to survive.



About Cally Worden

About Cally Worden

Seasoned freelance writer Cally Worden lives with her family and dog in a quiet corner of rural France. A love of the outdoors, and a fascination with her children's ability to view life with fresh eyes provide the inspiration for much of her work. Cally writes regularly for various websites and UK print publications on subjects as diverse as parenting, travel, lifestyle, and business, and anything that makes her smile.

Website: Cally Worden

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