A new study commissioned by KPMG found that 4.8 million UK employees are paid less than the living wage, which is currently £8.30 in London and £7.20 throughout the rest of the UK.
This is a timely report, as new targets are expected to be announced next Monday, at the start of the first ever Living Wage Week.
Many large employers could afford to adopt the living wage. The problem has been that many employers are effectively on investment-strike while they wonder what the economy will do next. UK corporate reserves have risen to the record level of £729 billion (about 3/4 of UK annual GDP) and have increased by £84 billion since the recession began. If these companies paid a living wage there would be enough new money circulating to revive consumer spending and business confidence, thus helping to kick-start the recovery.
Furthermore, many of these companies could actually gain from adopting the living wage. First, their reputation for corporate social responsibility would be enhanced – being “nice” can be a valuable selling point. Second, they would derive solid personnel benefits in terms of recruiting, retaining and motivating high-quality staff.
To defeat poverty pay we need the National Minimum Wage to be set at the highest level that can be sustained, we need more trade union members and collective batrgaining - According to ONS, trade union members earn 18 per cent more than non-members. But we also need more large companies with thinking capacity to adopt the living wage, politicians to actively promote it, and unions and community groups to make it a target wherever possible.
We expect the new Living Wage Foundation to announce next week that the first 100 living wage employers have been accredited. There are many more in the pipeline. Let’s work together to turn this stream of good news into a flood of decent paying employers.