In a 2012 article, Jo Haigh suggested that we are not in the same economic times as we were in 1999 when the national minimum came in. And it still stands relevant today.
“Huge numbers of British firms are struggling with profitability, struggling to even stay afloat,” she said. “While increases of nearly £1 an hour might not sound much, rounded up with employers national insurance across the board for many a company, it could undoubtedly tip them into loss making situations – and loss making situations make for job losses.
“Equally, we are living in an age where employers have to freeze wages year in, year out to combat the recession, and having one group at the bottom with enforced rises can also work against the very motivation the campaign is supposed to induce. By heightening some wages at the bottom, it does not preclude that wages across the board will be heightened, only that more people will be paid more similarly, giving less incentive to progress from the bottom rung. That in turn will do damage to companies who might otherwise yet ride out these grim times.”
Simply put, there was and still is a problem with the living wage.
Up and down the country, more than 5m people get paid less than the living wage, with Birmingham Northfield toping the list of living wage blackspots.
In Northfield 53.4 per cent of people working there earn less than £7.85 an hour, followed by Kingswood near Bristol (51 per cent) and Dwyfor Meirionnydd in North Wales (50.9 per cent).
TUC general secretary Frances O’Grady said: “Working families have experienced the biggest squeeze on their living standards since Victorian times, and these living wage figures show that women are disproportionately affected. Pay has been squeezed at all levels below the boardroom, and the government’s mantra about ‘making work pay’ is completely out of touch with reality.”
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As O’Grady suggested, for working women the picture is bleaker. A shocking 61.3 per cent of women working in Birmingham Northfield are feeling the brunt of taking home less than the living wage. This was followed by Kingswood at 59.6 per cent and East Yorkshire (58.7 per cent). And over half of women working in Heywood and Middleton (53.9 per cent), Dwyfor Meirionnydd (53.1 per cent) and Blackpool South (50.7 per cent) also earn less than £7.85 an hour.
In more general terms, workers in Harrow West in north west London (48.9 per cent), Chingford and Woodford Green in north east London (48.3 per cent), East Yorkshire (42.4 per cent), Blackpool South (42.1 per cent), South East Cornwall (40.2 per cent), Heywood and Middleton in Greater Manchester (39.8 per cent) and Rhondda in south Wales (38.9 per cent), are no stranger to being payed less.
And in some parts of the country – mostly in the South East – there are high paying areas where workers fare much better. In Poplar and Limehouse in East London just 7.5 per cent of people working there earn less than the living wage, followed by Edinburgh South West (7.9 per cent), Guildford (8.4 per cent), South Cambridgeshire (8.5 per cent) and Runnymede and Weybridge in Surrey (8.9 per cent).
“The number of living wage employers is growing rapidly and unions are playing their part in encouraging more employers to sign up and pay it,” said O’Grady. “But we need to see a far wider commitment to pay the living wage from government, employers and modern wages councils – to drive up productivity and set higher minimum rates in industries where employers can afford to pay their staff more.
“Extending the living wage is a vital step towards tackling the growing problem of in-work poverty across Britain.”
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