5 November 2012 Last updated at 08:56 ET

Q&A: The living wage

The idea of a living wage, to lift low-paid workers out of poverty, seems to be gaining ground.

The Labour leader, Ed Miliband, now favours making it part of his party's manifesto for the next general election.

And the charity behind the idea, the Living Wage Foundation, has designated the 4-11 November 2012 as living wage week, to promote the idea.

It is not a brand new concept though.

It has been around in its present form since 2005, when it was adopted by the Greater London Authority (GLA) for its own staff in London.

The idea of the living wage has been promoted by both London mayors since then, Ken Livingstone and Boris Johnson.

It has also been adopted by some other employers, around the UK as well as in London, as a benchmark for their lowest levels of pay.

What is the difference between the living wage and the national minimum wage?

The first thing to realise is that the living wage is an informal benchmark, not a legally enforceable minimum level of pay, like the national minimum wage.

The national minimum wage is set by the Chancellor of the Exchequer each year on the advice of the Low Pay Commission. It is enforced by HM Revenue & Customs (HMRC).

The living wage is currently calculated by the Centre for Research in Social Policy at Loughborough University, while the London living wage has been calculated by the GLA since 2005.

The basic idea is that these are the minimum pay rates needed to let workers lead a decent life.

How much is it, exactly?

The living wage is now set at £8.55 an hour in London and £7.45 an hour in the rest of the UK.

By comparison, the national minimum wage is significantly lower, at £6.19 for those aged over 21.

How much do people actually earn?

The most authoritative data comes from the Annual Survey of Hours and Earnings 2011, compiled by the Office for National Statistics.

It shows that the bottom 10% of the adult full-time workforce earned £7.04 an hour in 2011.

The middle earnings level was £12.64 an hour. Meanwhile, the top 10% of earners took home an average of £26.63 per hour.

Among adult part-time workers, the bottom 10% earned £5.93, the middle earners took home £8 an hour and the top 10% earned £19.92.

In fact, 40% of part-time staff earned £7.19 or less last year.

So it is this group of workers who would benefit most from an uplift in their hourly rates to the living wage of £7.45.

How many employers actually use it as a benchmark?

About 140 employers so far, which is very few.

Of course, some may have no need of such a benchmark as they pay all their staff above that level anyway.

But plenty of employers pay less.

In October, the accountancy firm KPMG (which supports the living wage idea) reported that 20% of all workers in the UK, nearly five million people, are paid below it.

Have campaigners found it hard to bring in a living wage?

Yes, progress in raising the lowest levels of pay above the minimum wage level has been slow.

Recently, some big local authorities have adopted it, such as Cardiff, Birmingham and Newcastle.

But other workers have found it a struggle.

Cleaners in the Houses of Parliament went on strike back in 2005 to demand pay rises that would bring them up to the living wage. They achieved their aim in 2006.

Some cleaners on the London Underground staged industrial action, including strikes, over two years before Transport for London (TFL) conceded a deal based on the living wage in 2010.

Why are people talking about it now?

Supporters of the living wage are currently stepping up their campaigning.

But the issue of low pay for employees has become even more pressing in the past few years.

Since 2008, the combined effect of the recession, high unemployment, stagnating wages levels, and high inflation, has depressed annual income per head by 13%, according to a recent analysis by the Office for National Statistics.

Some supporters of better pay for the low-paid also argue that employers who pay their staff too little are effectively benefiting from taxpayers, who subsidise the low wages of their staff by paying their employees top-up state benefits such as tax credits.

If basic pay levels were higher on average, so the argument goes, then the state would save a fortune in benefits.