There has been a rise in the number of low paid jobs in the UK for the first time since 2020, with one in eight roles now being paid below the ‘real’ Living Wage.
According to the Living Wage Foundation’s report, there were 3.7 million UK jobs paid below the “real” Living Wage in April 2023, 200,000 more than a year earlier – about one in eight jobs.
The figures were revealed by analysis of the Office for National Statistics’ February labour market figures.
The hospitality sector has the highest rate of low paid jobs, with nearly half (48.1%) of all jobs in the sector paid below the “real” Living Wage. This is roughly twice as high as the next two sectors with the highest rate of low pay; arts, entertainment and recreation (24.7%) and retail and wholesale (23.2%). Hospitality has been the sector with the highest level of low paid jobs for 12 years running.
‘Real’ Living Wage
‘Real’ Living Wage rates increase by 10% again
Higher than anticipated levels of nominal wage growth and sharp increases to the national living wage (NLW) reduced the numbers of low paid jobs in the UK in 2023.
In 2022 the Living Wage Foundation, which sets the annual “real” Living Wage, recorded the lowest number of low paid jobs on record. This was because wage growth for lower earners over this period was particularly high, driven by both high inflation and a sharp increase in the NLW. In contrast, the real Living Wage rates in place during April 2023 were calculated in September 2022, and therefore did account for the
persistently high inflation that began in 2022. As a result, both the UK rate
and the London rate increased a record amount.
Regional variations
The north-east of England has the highest proportion of low paid jobs (15.9%), closely followed by East Midlands (15.7%) and Northern Ireland (15.6%). Six of the 10 local authority areas with the highest levels of low pay were in greater London: Haringey (32.7%), Brent (29.5%), Waltham Forest (28.8%), Bexley (28.5%), Harrow (26%) and Redbridge (28.2%). Elsewhere, with similar proportions of low paid jobs were Hyndburn in Lancashire (26.3%); Mansfield, Nottinghamshire (25.3%); East Lindsey, Lincolnshire (25%); and Thanet, Kent (24.7%).
The regions with the lowest proportion of low paid jobs were the south-east of England and Scotland (10.1% respectively), the south-west of England (11.8%) and eastern England (12%). These were also the four regions with the lowest proportion of low paid jobs in 2022.
Other findings from the Living Wage Foundation analysis revealed that 15.4% of jobs held by women were paid below the Living Wage, compared with 10.4% of jobs held by men. The gap had narrowed since 2012 but widened slightly between 2022 and 2023. Jobs held by women also accounted for 59.5% of all jobs paid below the Living Wage, 2.2 million in total.
A higher proportion of part-time jobs (28.3%) were paid below the Living Wage in April 2023 than full-time jobs (7.5%). This gap has narrowed over the past decade, but increased slightly between 2022 and 2023.
Cost-of-living crisis
The research found that 39% of those earning less than the “real” Living Wage reported regularly skipping meals for financial reasons during the year to August 2023. A third have been unable to heat their homes and quarter have fallen behind on their rent or mortgage payments.
Half (52%) said that earning less than the real Living Wage during the cost-of-living crisis has affected their mental health.
The real Living Wage is calculated based on what people need to live on. It currently stands at £12 per hour (UK) and £13.15 (London). For a full-time worker, that represents £3,081 more than someone earning the government’s NLW. A worker on the London Living Wage would be £5,323.50 better off than someone on the NLW.
Katherine Chapman, Living Wage Foundation director, said: “Today’s findings show there is more to do with 3.7 million workers not earning a wage in line with the cost of living.
“With the cost-of-living crisis far from over, earning a real Living Wage has never been more important. Employers who want to do the right thing and protect their staff from rising prices can do so, by joining the 14,0000 Living Wage employers who are committed to always paying a wage in line with the cost of living.”
In January pub chain and brewer BrewDog pulled out of the real Living Wage pledge, a move that was swiftly followed by outsourcing giant Capita.
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