New government minimum wage is not a Living Wage

Peter kelly

Hearts FC was the first football club to implement the Living Wage in Scotland

New minimum wage rates come into force today but campaigners remind it falls well short of Living Wage rates 

1st April 2016 by Robert Armour 0 Comments

Employers and workers are being warned the Tories’ “national living wage” (NLW) rate being implemented by the UK government today (1 April) falls over £1 an hour short of the Living Wage as set by the Living Wage Foundation.

The new mandatory NLW requires employers to pay workers aged 25 and over at least £7.20 an hour.

It is expected to give 1.3 million workers an immediate pay rise across the UK.

However campaigners say UK government is trying to package minimum wage proposals as a new living wage, but the actual Living Wage is £8.25 per hour, over £1 an hour more. 

Over the course of a year, this is equal to £2,184 extra for someone working 40 hours a week. 

The Scottish Living Wage Campaign, set up in 2007 by the Poverty Alliance and STUC, joined other campaigners across the UK demanding a Living Wage to help address low pay and in-work poverty. Over the last five years thousands of organisations have opted to pay the Living Wage and have been accredited as official Living Wage Employers.

The strength of the movement calling for a Living Wage is one of the reasons why the chancellor decided to call the NLW rate a ‘living wage’.

Peter Kelly, chair of the Scottish Living Wage Campaign, said: “While any increase in the minimum wage is to be welcomed, it is important that people recognise that this is not a living wage.

“The new rate has no relation to what people actually need to live on, and assumes that those under 25 have lower living costs than their older counterparts.

“When you consider that there is a gap of around £2,000 per year between what the UK Government call a living wage, and the actual Living Wage, what we are talking about here is a substantial sum of money.

The new rate has no relation to what people actually need to live on - Peter Kelly

“We now have over 500 accredited employers of all sizes and industries in Scotland, showing that paying the Living Wage is not only the right thing to do but it has business benefits too.

“We hope that other employers will join them in the coming months, and ensure that all employees get paid enough to live on”.

The TUC said the government needed to ensure that everyone benefited from the NLW.

"Britain desperately needs a pay rise, and this increase is good news for those aged 25 or older," said TUC general secretary Frances O'Grady.

"But the government must ensure that younger workers are not left behind; 21 to 24-year-olds will not be seeing an increase.

"This is not fair. Future wage increases must narrow the pay gap between old and young."

The Living Wage Foundation added: "The job is not done when it comes to tackling low pay," said the foundation's director, Katherine Chapman.

"Businesses who can afford to pay a rate that reflects the real cost of living should do so and join over 2,300 employers signed up to pay our higher voluntary Living Wage.

"For profitable business or those who see themselves as innovators and leaders, simply not breaking the law on pay is not enough. Many businesses want to aim higher."