NOTE: This is a guest blog post from Matthew Butcher of FairPensions.
A Living Wage is the minimum hourly wage required for housing, food and other basic needs for an individual and their family. Within London it is decided each year by the Mayor’s office and is currently £8.30. For the rest of the country, the Centre for Research in Social Policy at Loughborough University has calculated a single rate which is £7.20 per hour. The National Minimum Wage, on which 684,000 people survive, is £6.08 per hour.
The working poor make up a surprisingly, and worryingly, large proportion of the workforce in this country. According to a report by the Resolution Foundation 20% of all employees earn less than a Living Wage. Inflation, currently hovering at around 5%, is hitting Britain’s low paid millions very hard. Meanwhile companies such as Intercontinental Hotels, Capita and Barclays continue to make hundreds of millions of pounds in profit, at the very least. The wage ratios between CEO pay and average pay in Britainís biggest companies have in recent times been up to a staggering 1374:1.
Though the inequality between high and low earners certainly highlights the case for a Living Wage, it is the struggles faced by those on low pay and their families which tend to motivate campaigners. Growing up in families with low paid parents has effects on children for the rest of their lives. Of the 2.8 million children in the UK living in poverty in 2008/9, a shocking 59% of them have one or both parents in work. Children who grow up in poor households are, according to the Marmot Review, more likely to be affected by obesity, heart disease and mental health problems. Children from low income families are also less developed by the time they reach school age.
Photo by andypowe11
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