Renewed calls for Living Wage sparked by 8.1 million people on inadequate income

Stagnating wages and job insecurity put households at risk of unacceptably low income, says new report

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It’s been a day of bad news for workers – or more accurately, a day of confirmation, with the release of two sets of figures describing the difficulties working people face today in the UK.

ONS figures show that the number of people forced to work a second job has soared to over 100,000 due to the cost of living. Meanwhile, an Oxfam study shows that by next year the world’s richest one per cent will earn more than the rest of the world combined.

The Joseph Rowntree Foundation’s Minimum Income Standard (MIS) project is designed to define what constitutes an adequate income. It is based on public opinion about what goods and services are necessary to maintain an acceptable standard of living.

The Standard defines a fairly rudimentary list of things that people say they need not only to survive but to ‘participate in society’ – three square meals, adequate clothing, small electrical appliances, internet access, toiletries.

JRF note that although MIS is not a poverty threshold, almost all households that are officially defined as being in income poverty (having below 60 per cent of median income) are also below MIS.

The think tank’s most recent research into MIS, published today, paints a stark picture. It finds that the proportion of people living in households with an income below MIS increased by nearly a third between 2008/9 and 2012/13. In fact, the proportion of people below this level has increased almost every year since 2008.

The research finds that the risk of having a very low income – defined as less than half of the MIS – has ‘increased sharply’ in the four years to 2012/13.

Pensioners and couples without children are, as in past years, the most likely to have an ‘adequate’ (as opposed to well over the minimum) income. However, the proportion of couples without children on this minimum income is growing.

JRF suggests that changes in employment status may help explain the unexpected growth in numbers of people below MIS among certain groups, but that for most working households, the increase can be better explained by stagnant wages and cuts to in-work benefits than by people actually having less work.

This means that the risk of a household falling below MIS can increase even while employment status remains the same.

The study also finds that almost a quarter – 23 per cent – of young adults in childless households had been badly hit not only by poor job prospects but by low incomes when they did find work.

There are sharp regional variations in the findings. The biggest rise in the risk of living below the MIS has been seen in Wales, where a staggering 29.4 per cent of families with children now earn less than the living wage.

London remains the most ‘at risk ‘ area, with 29.9 per cent of households at risk of not having enough money for an ‘acceptable’ lifestyle. Least at risk of falling below MIS are people living in the east and south west.

JRF make a number of recommendations aimed at lifting people further above the threshold.

These include pegging minimum wage rates to changes in living costs and average wages – as the ONS showed today, the fact that basic earnings have not changed according to the cost of living is making daily life a struggle for huge numbers of people.

JRF urges more employers to pay the Living Wage, and allow earners to keep more pay before benefits are withdrawn.

6 Responses to “Renewed calls for Living Wage sparked by 8.1 million people on inadequate income”

  1. treborc1

    But labour have no dropped it from anything and all speeches when I asked I was told it was up to employers by Council in Wales has told the Unions you want to have a living wage no problem, just give us a list of the 500 people you need sacking and which tasks you wish us to give up on. The council has just been told after struggling with 35 million in cuts they are to get another £45 million in cuts and the Union asked they get a living wage. It would not surprise me if the Union say go on sack 500 but if a Union trade Union official is picked then strike action will be on the menu.

    Two other Councils have stated no living wage but how about all jobs being out sourced or zero hour contracts.

    We have had the labour party for three terms in which we say a min wage set way to low and now a living wage being offered with labour councils refusing it with massive cuts and labour saying they would also cut the same.

  2. Mike Stallard

    The economy is based on selling stuff at the right price. No government can alter this.
    People are either good or bad at this. Some make a lot of money. Others do not.
    And then there are people coming from countries where an allotment shed houses ten people and where there is certainly no internet access – or even, often, one square meal a day.
    I know several of these people. They are my friends. Fiddling with the minimum wage has little or no effect because it is always paid – with deductions of course. Many people are thrilled with £3.00 an hour.

  3. Guest

    So your argument is based on illegal deductions.
    As you blame the Other.

  4. Mike Stallard

    The Other? Sorry, no comprendo.

  5. TonywilliamI

    If the 8.1 million people on or below the current minimum hourly rate registered to vote, and voted at the coming election we may be able to get to a living wage instead of a minimum wage.

  6. pads1982

    May I sugeest they up skill and find something that pays better, engineers are employed from all over the world as we can’t get anyone in this country, there is also the option of moving somewhere like Poland to work/live

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