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The Living Wage Commission will examine the reality of low pay in Britain

The Living Wage Commission will examine the reality of low pay in Britain

The Living Wage Commission’s first report, Working for poverty, has been released today. The report warns that the economic recovery could fail one in five people in paid employment.

The report, which provides a detailed analysis of the rise of low pay and working poverty, shows that spiralling living costs and stagnating wages at the bottom create a “double squeeze” on the lowest paid. The five million people in low paid employment have the smallest budget elasticity, and are therefore hit hardest by rising living costs.

Working for poverty outlines the changing nature of low pay and poverty in the UK:

  • 6.7 million of the 13 million people in poverty in the UK are in a family where someone works – over half the total for the first time
  • 5.24 million workers in Britain – equal to 21% of the workforce – are paid below a Living Wage: an increase of 420,000, or 9%, over the last 12 months
  • Housing costs have tripled in the last 15 years, one and a half times the amount by which wages have risen, and electricity, gas and water bills have risen 88% in the last five years
  • 2.9 million people classed as over-indebted have a household income below £15,000 a year.
  • Low paid workers are increasingly turning to support to get by, the report finds. This includes a growing dependence on debt, food banks and in-work benefits.

Dr John Sentamu, the Archbishop of York and Chair of the Living Wage Commission, said today:

“The idea of making work pay is an empty slogan to millions of people who are hard pressed and working hard; but find themselves in a downward social spiral. They are often in two or three jobs just to make ends meet. Meanwhile the UK taxpayer picks up the bill in tax credits, in-work benefits and decreased demand in the economy.
“With the economy showing signs of recovery, employers that can pay a Living Wage must do so. They should choose between continuing to make gains on the back of poverty wages, or doing the right thing and paying a fair wage for a hard day’s work.”

The Living Wage Commission will release its final report in June 2014.

The interim report is available to view here: Working for Poverty.

This post originally appeared on the Living Wage Commission blog, and is cross posted here with permission.