National Living Wage Failing Low Paid Workers
A study conducted by the Living Wage Commission (appointed by the Living Wage Foundation) has revealed that the new national living wage of £7.20 per hour is failing to provide an adequate source of income to workers over 25.
The national living wage, not to be confused with the Living Wage set by the Living Wage Foundation, was introduced by the government in April 2016 in order to 'move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society'.
The Commission attributes the inadequacy of the national living wage to the fact that wages are not rising in line with basic living costs, such as rising house rents and petrol prices. Millions of low paid workers are therefore struggling to attain a basic standard of living. This research emerges following the announcement that there will be no increase to the national living wage in line with the National Minimum Wage increases on 1 October 2016.
In contrast, the Living Wage set by the Living Wage foundation is calculated according to the basic cost of living in the UK. The current UK Living Wage in London is £9.40 per hour and £8.25 per hour elsewhere in the UK. Unlike the national living wage, employers can choose to pay the Living Wage on a voluntary basis.
A number of businesses have reported a decrease in profit since the introduction of the national living wage, with both John Lewis and Mitie warning of job losses. As a result, any suggestion that the national living wage should go up is likely to be controversial.