‘Lifting 25% of workers to Living Wage would benefit UK economy’

THE UK economy would benefit from a £1.5bn boost if just one in four low-paid workers received the voluntary real Living Wage, a new study suggests.

Increasing wages to the rate of £10.85 an hour in London and £9.50 outside the capital would boost productivity and spending, said a report by the Living Wage Foundation and the Smith Institute think-tank.

The study also found that an increase in Living Wage jobs could provide huge benefits to local economies, especially cities such as Cardiff, London, Greater Manchester, Liverpool and Glasgow.

The report said that if a quarter of low-paid workers were lifted on to the Living Wage, more than 1.5 million people would benefit, giving an average annual pay rise of £520 outside London and £950 in the capital.

The foundation said that despite the impact of the Covid crisis, employers have continued to commit to pay the real Living Wage, with more than 2,900 employers signing up since March 2020.

Despite the trend, more than five million people are still employed in jobs paying less than the real Living Wage, it was reported.

Graham Griffiths, director of the Living Wage Foundation, said: “All of us have been affected during this crisis, but the real Living Wage offers a clear way to now recover and rebuild with stronger foundations.

“Workers and families need jobs that meet their everyday needs and allow them to thrive. Businesses need healthy and motivated workers unburdened by the stress of low pay.

“Cities and towns need local consumers with sufficient wages to stimulate economic growth.”

Paul Hunter, deputy director of the Smith Institute, said: “The real Living Wage not only transforms the lives of low-paid workers and improves business performance, but also provides a growth dividend for local economies. As we exit the worst of the pandemic, increased real Living Wage coverage can boost spending and support a wage-led recovery.”

Sadiq Khan, Mayor of London, said: “I am extremely proud that the number of Living Wage accredited employers in London has more than doubled since I took office, to nearly 2,300.

“This research shows clearly that paying the London Living Wage makes good economic sense.”

Mayor of Greater Manchester Andy Burnham said: “Our ambition is to make Greater Manchester the UK’s first Living Wage CityRegion. This report clearly sets out the wider benefits that would be felt in our local economy”

The real Living Wage is higher than the official minimum wage rate of £8.91 an hour for adults.