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Agenda:
Welfare reform, poverty and inequality
Third Sector Support:
Campaigning
Location:
UK

The campaign for a Living Wage has been boosted this month by Labour Leader, Ed Milliband, who has pledged that he will give12 month tax breaks to employers who pay the Living Wage in 2016 if he is elected in 2015.  He wants to make the Living Wage the Minimum Wage.   ­­

According to the Living Wage Foundation, more than 5 million people in Britain earn below the Living Wage, with Scotland accounting for 435,000 of these – an increase of 70,000 since 2012.  Those currently in receipt of the Minimum Wage and working 40 hours per week would see their incomes increase by £2787 a year, or £53.60 a week if they earned the Living Wage.  Adopting the Living Wage would a save the Government money, as wages wouldn’t need to be top­ped up so much with tax credits, or other welfare benefits.  It has been argued that the UK Government effectively subsidies the payment of wages for massive corporations who make hundreds of millions in profits at the expense of their low paid employees and the taxpayer.

The Living Wage was raised earlier this month to £7.65 across the UK and £8.80 for London, an increase of 20p and 25p respectively, meaning that around 30,000 low paid workers whose employers have signed up to the Living Wage will receive a pay increase of £400 this year.

While the UK Government said that adopting the Living Wage would lead to 160,000 job losses, Howard Reed, the leading economist who carried out the research, has said that on the contrary, the move would increase employment by 60,000.

Unison commissioned research into the impact of the living wage on the UK economy and found that GDP could rise by between £5.6bn and £10.7bn if the Living Wage was introduced on a statutory basis.

In October national minimum wages rates were increased by the following:

  • the adult rate increased by 12p to £6.31 an hour
  • the rate for 18-20 year increased by 5p to £5.03 an hour
  • the rate for 16-17 year olds increased by 4p to £3.72 an hour
  • the apprentice rate increased by 3p to £2.68 an hour
  • the accommodation offset increased from the current £4.82 to £4.91

Source: Local Gov website


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