Economic downturn has pushed a further 1.4 million employees below the Living Wage – the rate deemed necessary for a basic standard of living. Low Pay Britain 2013 shows that 4.8 million Britons (20 per cent of all employees) earn below the Living Wage – a leap from 3.4 million (14 per cent) in 2009 – at the height of the recession.
The Living Wage was calculated at £7.20 outside London and £8.30 in the capital for the period covered by the report – April 2012 – the most recent full figures available. Since then the Living Wage has risen to £7.45 an hour outside London and £8.55 in the capital.The report provides a comprehensive breakdown of the extent of sub-Living Wage pay and low pay more generally among the country’s 25 million employees, including by age, gender, sector and region.
- One in four female employees (2.9 million or 25 per cent) earned less than the Living Wage in 2012 – compared to 15 per cent of male employees (1.9 million).
- Three-quarters of employees aged 20 and under (77 per cent) earned less than the Living Wage.
- Just 16 per cent in the South East and London were paid below the Living Wage, compared to almost 23 per cent in Wales and more than 20 per cent in many other parts of Britain.
- Pay below the Living Wage is most common in the hotels and restaurants sector, where two in three employees (67 per cent are low paid) are in this position. It is least common in public administration and defence (just 2 per cent).
- Those in low pay – a different, internationally-recognised measure defined as those earning below two-thirds of the median hourly rate (£11.15 in the period covered by the report). Using this definition, 5.1 million of all employees (21 per cent) are low paid.
- The report also suggests the emergence of a two-tier workforce in Britain, in which the lower tier is increasingly characterised by low-paid, low-skilled work which is often temporary, part-time or self-employed.