Implementing living wage ‘toughest in cities where more workers are low paid’
4 January 2016
Implementing the new national living wage will be toughest in cities where more workers are low paid, a new study has shown.
The Resolution Foundation said more than one in four workers in areas such as Sheffield, Nottingham and Birmingham, will be affected by the new rate by 2020.
An analysis by the think tank said that the new rate of £7.20 an hour for workers aged 25 and over, which comes into effect in April, will be felt differently across the UK.
By 2020, about six million employees across the UK – 23% of all workers – are set to be affected by the new wage rate, said the report.
But a far higher share of staff will see their pay increase in many cities across the country, such as 28% in Sheffield, 27% in Nottingham and 26% in Birmingham.
In contrast just 13% of employees in Oxford are set to be affected, 14% in London and 15% in Cambridge.
Minimising any job losses, and ensuring that large groups of workers do not get stuck earning only the legal minimum, should be a top priority for national Government, local leaders, businesses and soon-to-be elected city mayors, said the Foundation.
The Foundation added that, despite the name, the Government’s new legal wage floor was not a “living wage”, and there remained plenty of scope to expand the reach of the voluntary living wage, which is currently set at £8.25 in the UK, and £9.40 in London.
Adam Corlett, economic analyst at the Resolution Foundation, said: “The new national living wage will have a huge impact on low pay, particularly towards the end of the parliament as it approaches £9 an hour.
“But implementing the new wage floor will be challenging, particularly in cities like Sheffield where wages tend to be lower. National, local and new regional politicians must work closely with employers to ensure that the national living wage is a success, particularly in low-paying sectors.
“But it will take more than a higher wage floor to tackle Britain’s low-pay problem. Expanding the reach of the voluntary living wage campaign will still deliver higher pay for thousands of workers. It’s also vital that employers create progression routes at work so that staff can be lifted out of low pay altogether.”
Photo from Nick Ansell / PA Wire