More workers than ever earn less than living wage

This week the Office for National Statistics (ONS) released data showing that a growing proportion of the UK workforce is earning less than the living wage, which currently stands at £7.85 per hour across most of the UK and £9.15 in London, where living costs are higher.

In 2014 an estimated six million jobs paid less than the living wage, and over half of these were part time jobs. This is a significant increase on previous years, with the proportion in London increasing from 13 per cent in April 2010 to 19 per cent in April 2014. For the rest of the UK only three years of estimates were available, however the data showed an increase from 21 per cent in April 2012 to 23 per cent in April 2014. 

It is possible that the exact number could be higher than this, as data was not collected for those under the age of 18, or workers on the youth, training and apprenticeship rates of the minimum wage. 

George Osborne announced in his Budget that from April 2016 the national minimum wage would be increased to £7.20 per hour and be rebranded the 'national living wage'. While this is a substantial increase, it still stands below the true living wage. This is further affected by the cuts to tax credits. An analysis by the Institute for Fiscal Studies showed that the increase in the minimum wage would cover only a quarter of the income lost by working families due to tax credits cuts.

Current earning projections expect the minimum wage to increase to £9 per hour by 2020, however this is still not expected to reach the living wage, which is also expected to rise, particularly due to the cuts to tax credits support. 

By James Francis