As you dash out to do the last of your Christmas shopping, spare a thought for the person behind the counter, as she is likely to be one of the five million British workers paid too little to cover basic costs like housing, food and clothing.
In a recent report, Low Pay Britain, the Resolution Foundation found that 27 per cent of women and 16 per cent of men earned less than the living wage.
Sixty per cent of retail staff, over half of workers in elementary jobs such as labouring and a third of workers in service occupations like hairdressing earn less than the living wage - the hourly rate needed for an individual to meet their own or their family’s basic day-to-day needs.
The living wage is currently set at £8.30 an hour for London and £7.20 for the rest of the UK.
Low-paid workers are more likely to be young and working part-time in the private sector.
Amy* is 25 and lives in Scotland, and earns £6.30 an hour as a senior sales assistant.
“People tend to think that you’re only working in a shop so just standing about not doing much, but you still have to go into work every day and do a job,” she said.
Her colleagues who are under 18 get £3.57, which is below the national minimum wage of £3.68 for workers of that age.
“I just don’t understand why, when they’re doing the exact same work, that they get so much less.
“In principle obviously I think the minimum wage should be higher than what it is, but I think everyone should be on the same rate if doing the same job,” she said.
Amy feels trapped. “The only experience I have now is working in shops really. I’m kind of stuck until I can save enough to do what I really want – and with the money I’m on that will be a while.
“There’s nothing I can do – where can I go?”
Amy doesn’t feel able to challenge her rate of pay, particularly in the current climate.
“They’re constantly talking about ‘cuts’ so I doubt very much that an increase in pay would be something they’d even consider,” she said.
Citizens UK, a community organisation made up of trade unions, religious groups and community activists, established a Living Wage Campaign in London in 2001, after parents in the East End told them they were frustrated that working two minimum wage jobs left no time for family life.
It has since established the Living Wage Foundation, and 140 employers including Barclays, KPMG and retail chain Lush are now paying the enhanced rate, lifting 10,000 families out of poverty.
Research by the foundation found 80 per cent of employers reported that the living wage had enhanced the quality of work, 66 per cent said it had a significant impact on recruitment and retention and 75 per cent believed it had enhanced their ethical credentials among consumers.
Guy Stallard, director of facilities at KPMG, said: “We’ve found that paying the living wage is a smart business move as increasing wages has reduced staff turnover and absenteeism, whilst productivity and professionalism have subsequently increased.”
The Living Wage movement is spreading across the UK
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Glasgow City Council adopted a ‘living wage’ of £7 per hour in 2009, and 700 council staff got a pay rise of £1,100 per year.
In 2010 the Glasgow living wage was increased to £7.15, and in April 2012 it will increase to £7.20.
So far 160 companies have signed up, and the Council would like to encourage more firms, especially in hospitality and retail, to follow suit.
One of the beneficiaries is 28-year-old Sarah*, a catering worker who started out on an hourly rate of £5.73 on a zero hour contract.
With low pay and unpredictable hours, she was finding it hard to cope.
“I was relying a lot on my parents for help. I didn’t know from one week to the next how many hours, if any, I was going to be getting,” she said.
The irregular working pattern meant it was difficult to access government support such as housing benefit.
“When I was working, it was too difficult to apply for anything like that because my situation changed from week to week.
“We would have to struggle on ill as you couldn’t afford for your wages to be docked, and we never really knew what holidays we were entitled to,” she said.
Sarah’s situation is set to improve as the company she works for has now been taken over by Cordia Services through Glasgow City Council.
She has been transferred to a 35-hour per week contract paying £7.30 an hour with sick pay, 28 days holiday and a points system, which tops up the hourly rate for evening and weekend working.
“If it works out the way it looks on paper then it will be great. Now I know I’m getting 35 hours I can work out my money better,” she said.
Glasgow City Council would like to be able to stipulate that all its contractors pay the living wage but has been advised that this would be illegal, so is pressing the Scottish government for a change in the law.
Despite this, the council has signed a £150m waste disposal contract with Viridor which stated its intention to pay the living wage from the outset.
Councillor Gordon Matheson, leader of Glasgow City Council, said that when they first considered introducing the living wage, the economy was buoyant, unemployment low and the number of jobs being created was increasing.
“But times have changed. In Glasgow, we are relatively well placed to avoid the worst effects of recession due to the massive body of work associated with the Commonwealth Games, but we have still felt an impact.
“However, for me, this actually strengthens the case for tackling low pay. We know that in times of recession, the impact is most keenly felt by low-paid workers.
“I have always believed that work is the best and most sustainable route out of poverty and yet recent studies have shown that the majority of children living in poverty in the UK have at least one parent in paid employment.
“The message from this is clear: low paid, transient, unskilled work is not sufficient to lift people out of poverty and that is something that all tiers of government must address.”
To find out more follow the links below:
The Living Wage Foundation
The Scottish Low Pay Campaign
Glasgow Living Wage
The Poverty Alliance
*The names of the workers featured in this article have been changed.
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