Unions welcome uptick in real living wage and call for substantial increase to statutory rates

Almost half a million people working for more than 16,000 Real Living Wage Employers throughout the country are set for a vital pay boost, as the Real Living Wage rates rise to £13.45 an hour across the UK (85p or 6.7% increase), and £14.80 an hour in London (95p or 6.9% increase).

Recent research by the Living Wage Foundation shows that as inflation grew over the past year, many of Britain’s 4.5m low-paid workers have struggled to make ends meet, with two in five (42%) having been forced to use foodbanks in the past year, rising to over half (56%) for low-paid workers with dependent children.

The Real Living Wage is calculated on the real cost of living, where employers commit to paying all their staff, as well as their third-party contractors like cleaners and security guards, at least the Real Living Wage. Across the UK, 1 in 7 employees now work for an accredited Living Wage employer.

Unions have welcome this announcement while emphasising that more will need to be done by way of stronger bargaining powers and ditching discredited pay review body systems in the public sector to eradicate in-work poverty and low-wage work outside of voluntary schemes like the Real Living Wage.

Unison’s Christina McAnea said:

This sets a clear benchmark for the rate of pay needed to keep workers out of poverty.

Low-paid staff working for fair employers are the ones who’ll see the benefits of this rise. But for most workers in public services, it’s the government’s responsibility to make sure they’re on a decent rate.

Workers can’t give their all for the public if they’re unable to meet the bills and feed their families. Thousands of NHS staff in particular will see their pay fall even further behind the real living wage rate.

Retail workers’ union, USDAW, released a statement welcoming the 6.7% increase and calls for a substantial increase in statutory rates:

The new Real Living Wage rates are a welcome boost for the lowest-paid workers. On taking power, Labour changed the remit of the Low Pay Commission, so that they take account of the cost of living and work towards ending rip-off youth rates. We call on the Government to again announce a substantial increase in statutory rates to help close the gap with the Real Living Wage. Usdaw is calling for a clear path towards £15 per hour for all workers aged over 18, and we call on employers to take notice of the new rates and negotiate increases in their base pay to reflect the cost of living.

The National Living Wage is expected to be set at around £12.71 from April, but the independent Low Pay Commission has not yet made its final recommendation to the chancellor, Rachel Reeves, on the issue.

The government’s minimum wage also only applies in full to over-21s, whereas real living wage employers promise to pay it to everyone over 18. At last year’s Budget, Labour pledged to scrap ‘discriminatory’ minimum wage rates for young workers. However, this week the government declined to confirm it would stick to its plans, following a Resolution Foundation report urging it to change course to stop young people being “priced out of entry into the labour market.”