Low paid jobs on the rise, with 3.7m jobs paid below real Living Wage since 2020

More needs to be done to tackle low pay in jobs, warns the Living Wage Foundation.

New analysis by the Living Wage Foundation (LWF) has found that the number of low paid jobs in the UK has risen for the first time since 2020. In April 2023, 3.7m jobs, equating to 1 in 8, paid below the real Living Wage, 200,000 more than the previous year.

This was the finding of the LWF’s latest Annual Survey of Hours and Earnings based on Office for national Statistics (ONS).

Hospitality has the highest rate of low paid work, with almost half (48 percent) of jobs in the sector having paid below the real Living Wage. This was the twelfth consecutive year the hospitality sector had the highest level of low paid jobs. It was also almost twice as high as the ‘arts, entertainment and recreation’ and ‘retail and wholesale’ sectors, in which 24 percent and 23 percent of jobs were found to be below the living wage respectively.

The study found that London has the worst five areas for low-paid jobs. The best performing regions were the South East and Scotland.

According to the LWF, in the past two years, a record number of employers have signed up to pay the real Living Wage. This includes third-party contractors such as security guards and cleaners. One in nine employees in Britain now work for an accredited Living Wage Employer. But the Foundation warns further inroads need to be made.

“The campaign for a real Living Wage has had a huge impact tackling in work poverty, with over 460,000 workers now receiving an annual pay rise thanks to the commitment of 14,000 accredited Living Wage employers. However, today’s findings show there is more to do with 3.7 million workers not earning a wage in line with the cost of living, said Katherine Chapman, Living Wage Foundation director.  

The real Living Wage is the only wage that is calculated on what people need to live in. Its current rate is £12 per hour in the UK and £13.15 in London. For someone working full-time on the real Living Wage they would receive £3,081 a year more than someone earning the government’s National Living Wage. In London, the difference is £5,323.50 annually.

Separate research by the LWF published in September 2023, found that for workers on low-incomes, the cost-of-living crisis is far from over, despite easing inflation. The research found that 39 percent of low paid workers reported regularly skipping meals for financial reasons and falling behind on household bills. This was down slightly from 42 percent in August 2022.

The proportion of workers on low pay who said they were unable to heat their homes stayed at 32 percent during the same period, as did those who had fallen behind on rent or mortgage payments. The number of low-income workers resorting to payday loans to cover living essentials fell slightly from 24 percent to 21 percent, the research found. 60 percent of workers on low pay reported using foodbanks in the 12 months to September 2023, up from 56 percent the previous year.

The statutory rate for anyone aged over 21 is set to rise to £11.44 an hour on April 1, 2024. In response to the LWF’s research, a spokesperson for the Department for Business and Trade said, millions of workers would benefit from the “largest pay rise to the National Minimum Wage.”

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

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