Five million paid less than living wage, says KPMG

Barman The vast majority of bar staff do not receive the living wage, the report claimed

One in five workers in the UK is paid less than required for a basic standard of living, a report has said.

The proportion is much higher among waiters and bar staff, at up to 90% of workers, the research for accountants KPMG suggested.

It said that nearly five million people failed to command the living wage - a pay packet that enabled a basic standard of living.

The rate stands at £8.30 an hour in London and £7.20 in the rest of the UK.

This rate is voluntary, unlike the National Minimum Wage - the amount that employers must pay by law, which is set at £6.19 an hour for those aged 21 and over.

"Times are difficult for many people, but of course those on the lowest pay are suffering the most," said Marianne Fallon, head of corporate affairs at KPMG, which has itself signed up to pay the living wage.

"Paying a living wage makes a huge difference to the individuals and their families and yet does not actually cost an employer much more.

"Tackling in-work poverty is also vital if we are to enable more people to improve their life prospects and increase social mobility in this country."

Why I pay the living wage

Mark Constantine

Mark Constantine, co-founder of cosmetics chain Lush, said he was encouraged to pay the living wage by staff at a Christmas party.

"I basically got cornered," he said. "Staff explained the situation to me."

He said that the advantage was that staff did not feel they needed to take on other jobs.

"They are not exhausted, and not worried about paying their rent."

He said that there were affordability issues for employers. Lush has introduced the living wage for staff in London and is "working towards" paying it in the rest of the UK.

'Tough choices'

The report suggested that Northern Ireland had the highest proportion of people earning below the living wage, at 24% of workers, followed by Wales at 23%.

The lowest levels were in London and the South East of England, both at 16%, it said. In terms of total numbers, London, the North West of England and the South East of England had the most.

When looking at sectors of employers, some 90% of bar staff and 85% of waiters and waitresses failed to get as much as the living wage.

Some 780,000 sales and retail assistants were not paid to living wage level, the highest total of any group of employees, the report suggested.

Frances O'Grady, the incoming general secretary of the TUC, said: "It is shocking that in this day and age, one in five workers is still earning less than is needed to maintain a decent standard of living.

"The living wage is not a luxury, and means that low-paid workers do not have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children.

Start Quote

When it comes to the living wage, politicians are really looking for a free lunch: or rather, a free pay rise. They want an increase in wages for people at the lower end of the pay spectrum that doesn't cost anyone any money”

End Quote

"Many more employers could afford to adopt the living wage, and we hope that many more decide to pay it in the coming months. Now more than ever is the time for employers to put an end to poverty pay."

But Mike Cherry, policy chairman for the Federation of Small Businesses, said: "Every employer would want to be as reasonable as they possibly can, but in the current economic climate it is not going to be possible for those sectors that have traditionally been unable to pay the national minimum wage."

He said rent and rates were becoming more expensive, and so were energy costs, so the living wage was an aspiration but not affordable for some employers.

He added that the market would determine what was affordable.

A separate report by the CBI said that employers have needed to take a cautious approach to employment and pay given the economic climate, and this is set to continue.

The group said that there would be pay restraint over the next six months, but this was designed to protect employment.

However, one 23-year-old care worker told the BBC News website that life was tough financially - even when on the living wage.

Report author Mike Kelly: "Businesses should look at wages in a more innovative way"

She said that the cost of petrol, when driving between the homes of the people she cared for, took a big chunk out of her pay which totals £7.21 an hour.

"It would be nice to have enough so I am not worried about paying rent every month and only having £100 left to spend," she said.

"I would like to live comfortably rather than struggling from pay cheque to pay cheque."

Regional pay

The government is considering whether to push on with plans to end national pay bargaining and introduce a system of regional or local pay rates.

However, a group of 60 academics have warned, in a letter to The Times newspaper, that any new system could widen inequalities between different parts of the UK.

The group claimed that there was "no convincing evidence" that regional pay would boost local economies, and that it could reduce consumer spending. They argued that would depress pay for public sector workers outside London and the South East of England.

This follows a campaign by unions to stop any introduction of regional pay rates for public sector workers.


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  • rate this

    Comment number 1262.


    You seem to be commenting on the assumption that all employers make good profits. That's not the case, many make losses or struggle to break even (SME's in particular).

    I can confidently tell you however, that British Gas shall not be making a loss but will continue to inflict hardship on the nation.

  • rate this

    Comment number 1261.

    Anyone who works full time should not have to be subsidised by the state (i.e. the taxpayer) and they certainly shouldn't have tax taken off them only for the state to give it back to them in benefits.

    The biggest problem is housing costs and unless we find some clever way of rolling back New Labour's reckless property boom between 1997 and 2007 it will always remain so.

  • rate this

    Comment number 1260.

    I knew a of a man who worked proudly his whole life as a barman at a family run hotel in Newquay. He supported his wife, put 2 kids through uni, had a new car every 2 years and went on holiday.
    The difference was that he worked for a company who paid him what he deserved.
    Snobbery clouds our judgement too much about what is a skilled job and big multinationals work with margins not people.

  • rate this

    Comment number 1259.

    10 Minutes ago
    But isn't this what this Parliament of elitists actually wants

    Well, of course it is - Tesco makes huge profits, but you and I subsidise their wages bill - as so many employees recieve top-up benefits. How does that work? Doesn't take much to work it out...a few words in the right ears...

  • rate this

    Comment number 1258.

    If you work no matter what job, it should pay enough so you can cover all the essentials, Rent, Bills and food. Make it pay to work on not stay on the dole.
    My patners firm has Degree graduates doing menial jobs as it's not worth them getting a higher paid one!!!! as they will pay more back on their loans.

  • rate this

    Comment number 1257.

    #1249: "The minimum wage needs lifting to a level where you do not have to claim any benefits, that would bring the benefits bill down and give a pay rise to millions of the poorer paid workers."

    A good idea in principle; however, I wonder how you would address the impact on employment (down) and prices (up)? A better approach would be to remove all government controls on the employment market.

  • rate this

    Comment number 1256.

    Huh. No wonder you left! =D

    I'm no great fan of "Ha! You were lucky" Yorkshireman stories, tbh. I worked at a shop for three months, and had to show up and make a scene after I'd quit to get paid at all (round figure in cash).

    The fact that this happened to me does not mean that I think it's something everyone should have to go through to prove themselves or whatever.

  • rate this

    Comment number 1255.

    Oh well, at least the low paid have the hope of the Lottery, oops it has paid out yet on all yesterdays plus Five winners.

    Oh dear!

  • rate this

    Comment number 1254.

    if benefits dudnt pay over the living wage , maybe the people that get up with self respect and go to work might have to pay a bit less tax

    The worm is turning and Labours benefit britain could be turning in favourt of the working people

  • Comment number 1253.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 1252.

    If having a decent wage is dependent on being well educated, then you may have failed to gain one dear chap.

    bunking off down the chippy they'd have a descent (sic) job and all the trimmings

    Epic fail as they say!

  • rate this

    Comment number 1251.

    So just what would 'Dave' and 'Ed' say about that... ?

    "FIVE MILLION !!! WOW !!! What a great idea ! Let's get some more of that !"

    Different colours, same Paymasters ...

    I think humanity is doomed ...

  • rate this

    Comment number 1250.

    27.pbharrison £1800 my heart bleeds, our total income is approximately that, my husband and I both work, he runs his own business to help make ends meet and we have two children in nursery which then swallows up my whole salary. "Acceptable" to me means being able to pay the mortgage and bills, feed and clothe my children and maybe just maybe afford a couple of Christmas presents for them.

  • rate this

    Comment number 1249.

    The minimum wage needs lifting to a level where you do not have to claim any benifits, that would bring the benifits bill down and give a payrise to millions of the poorer paid workers.

  • rate this

    Comment number 1248.

    No1241 treacle,
    The owners (1930's ) of the Daily Mail - forgers gazette, thought that Hitler was wonderful. I am led to believe that the current owners are 'not quite sure'

  • rate this

    Comment number 1247.

    It was 5 years ago.

  • rate this

    Comment number 1246.

    But isn't this what this Parliament of elitists actually wants? Most MPs come from a small group and are insulated from the realities of life. Hence the move to more part-time jobs, to 'reduce' unemployment, weak enforcement of minimum wage laws and continual union bashing if they speak up for the low paid worker. Why else would they continually push up the cost of fuel and indirect taxes?

  • rate this

    Comment number 1245.

    Well I work 37 hours a week, and can't even afford to feed my family, pay the rent or Gas/Electric, I don't have Sky or contract phones. And people down the street haven't worked a day in their life, have more disposable income and leasure products than I could ever dream of, something wrong here!

  • rate this

    Comment number 1244.


    'The question to those saying "Those complaining about not getting the living wage should get some skills":

    WHO will do these jobs that don't earn this wage?'

    The unemployed! (if they do actually want a job)

  • rate this

    Comment number 1243.

    For years we have bought anything foreign as long as it was 10p cheaper than something made in the UK. Try getting a German to do this and you'll see why we are where we are.

    I've never understood why minimum wage, tax allowances and benefits don't work in concert. It would avoid this sort of nonsense.


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