How Britain fares internationally when it comes to low wages.
On Monday the living wage increased to £8.80 an hour and there are now over 400 firms paying the living wage to staff.
At this rate, however, it will take 450 years for all employers to play their employees the living wage.
As a result of the increase, this week the living wage debate has again come to the fore – being picked up by Ed Miliband who on Monday pledged to give a tax break to firms which pay the living wage.
The living wage debate is also increasingly relevant due to the ongoing ‘cost of living crisis’. The economy may have started to register growth again but most people are not seeing that translate to an improved standard of living: prices have risen faster than wages in 39 out of 40 months since David Cameron came to office in 2010.
It also won’t feel like the economy is back on track for those who are forced to scrape ice from the inside of their windows this winter because they can’t pay their energy bills – Britain now has the second highest level of fuel poverty in Europe.
But going back to low pay, a graph tweeted this week by James Plunkett of the Resolution Foundation shows starkly just why increasing take up of the living wage is so important.
Britain ranks behind only the US, South Korea, Israel and Hungary in the proportion of the population earning less than two-thirds of medium full-time pay.
With so much talk of the ‘squeezed middle’ , it is something of a surprise to learn that almost a quarter of the working population in Britain is subsisting on very low wages. After all, when you think of the middle you don’t tend to think of people grafting to get by on a little more than the minimum wage.
This is also the type of economy we increasingly appear to be moving toward: close to 80 per cent of the jobs created since June 2010 have been in industries where the average wage is less than £7.95 an hour. There has also been a rise in the number of zero-hour contracts since 2010, adding a further sense of insecurity to the lives of those whose living standards are being squeezed.
If there is anything positive here it’s that by focusing on the living wage Ed Miliband has another potential vote winner; for while the political establishment remains obsessed with middle England, there are swathes of people on low wages who would fall short of any definition of ‘the middle’; the overwhelmingly middle class commentariat has yet to catch up with the reality of post-crisis Britain in this respect.
It’s also why the living wage is so popular amongst the electorate. According to the New Statesman, 60 per cent of workers believe that the minimum wage should be increased to the living wage even if doing so costs jobs. Perhaps in part that’s because there are other benefits for those who the measure wouldn’t impact directly: the living wage would save taxpayers money by moving people off of in-work benefits used to top up poverty pay.
The 2015 election is already being referred to by some as a living standards election; but with low pay becoming an increasingly prominent issue it might also turn out to be the living wage election, with the Conservatives caught flat-footed on the issue in the same way they have been on energy prices.
As Tory MP Robert Halfon has warned David Cameron, “We mustn’t make the same mistake the Conservatives made 10 years ago in opposing the minimum wage.”
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