politics

Minimum wage workers lost £10bn since 2016 compared with Real Living Wage staff


Workers paid the minimum hourly rate have missed out on £10billion in five years compared with grafters on the Real Living Wage, campaigners reveal today.

The Government rebranded the minimum pay floor as the “national living wage” five years ago – and the rate rises today from £8.72 to £8.91.

It was also widened to include employees aged 23 and 24; previously it was only due to those aged 25 and over.

But the Living Wage Foundation calculated that had its voluntary rate paid by 7,000 firms accredited with the campaign been paid by all employers instead of the minimum, workers would have collectively received an extra £10bn over five years.



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About two million workers are expected to benefit from today’s rises in the pay floor

A full-time employee on the Government’s living wage has lost out on £8,400 across the UK since 2016 – and £21,800 in London where costs are higher, according to the Foundation.

Director Laura Gardiner said: “The introduction of the national living wage has delivered a solid pay rise to minimum wage workers, and it’s welcome to see the Government continuing to commit to ambitious increases.

“However, there is still a substantial gap between this wage rate and one based on the cost of living, with national living wage workers falling billions of pounds short of a Real Living Wage over the past five years.

“The result has been millions of workers and families struggling to keep their heads above water.



Living Wage Foundation director Laura Gardiner

“The number of employers signing up to the Real Living Wage has continued to grow, even during the pandemic, as businesses recognise the benefits of a healthy and motivated workforce.

“Alongside a strong wage floor, more employers committing to go beyond the Government minimum and pay a Real Living Wage that meets the everyday needs of workers and families is how Britain recovers and rebuilds from this crisis.”

The NLW was £7.20 an hour when it was introduced in 2016.

The Real Living Wage stands at £9.50 outside London, and £10.85 in the capital.



Some families struggle to get by on less than the Real Living Wage

A full-time Real Living Wage earner over the age of 23 will receive £1,150 more over the coming year compared with a worker on the minimum wage.

For an employee in London the figure increases to £3,800.

The Government said about two million workers will benefit from today’s pay floor rises.

Prime Minister Boris Johnson said: “The national minimum and living wages have increased every year since they were introduced, supporting the lowest paid, and despite the challenges we’ve faced recently, this year will be no different.

“That’s why we’re providing a well-earned pay rise to two million people, which will be a welcome boost to families right across the UK.



Prime Minister Boris Johnson hailed increases in the minimum wage

“To make sure the next generation isn’t left behind, everyone over 23 years old will also now be eligible.”

Rates for other age groups also rise.

The hourly pay for under-18s increases from £4.55 to £4.62; the rate for workers aged 18 to 20 goes from £6.45 to £6.56 and the minimum for those aged 21 and 22 increases from £8.20 to £8.36.

Business Secretary Kwasi Kwarteng said: “This increase will help millions of families in every corner of the country, while supporting businesses as we prepare to safely reopen our economy and build back better from the pandemic.”





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