Cardiff council low paid get £1,500 'living wage' rise
The lowest paid workers at Cardiff council will be given a wage increase of around £1,500 a year as the authority claims to be the first in Wales to introduce a "living wage".
More than 2,000 staff will see their pay boosted to £7.20 an hour, £1.12 above the minimum wage.
Leader Heather Joyce said the workers were doing important, challenging jobs.
The council also announced it would have to find £55m worth of savings over the next three years.
The living wage figure is set annually by the Centre for Research in Social Policy at Loughborough University, and is calculated according to the basic cost of living in the UK.
It currently stands at £7.20 an hour compared to the current statutory minimum wage of £6.08 an hour for workers aged 21 and over.
Council leader Heather Joyce said the authority believed staff should be paid a decent salary for their work.
"But it is not only right in terms of social justice - it makes sense for the local economy too, putting a little extra in people's pockets that will help stimulate businesses across our city," she said.
Welsh NHS workers and Welsh government civil servants are already paid at least the living wage.
A number of big private sector employers, including Barclays Bank and accountants KPMG, are also signed up to paying it.
Minister for Local Government and Communities, Carl Sargeant, said he congratulated Cardiff on putting a living wage at the top of its priority list.
Labour has a manifesto commitment to find ways of making sure all Welsh workers are paid a living wage.
James Pritchard, head of the Save the Children charity in Wales, said Cardiff council was "leading the way for Wales".
Business organisations have previously warned Welsh ministers not to try to force them to raise wages in the private sector, for example by inserting living wage clauses in government contracts.
Robert Lloyd Griffiths, of the Institute of Directors, has said he was concerned the living wage would effectively become the new minimum wage.
Cardiff council also said it would be radically reducing its "multi-million pound reliance on management consultants" and would be restructuring its senior management team to protect front line jobs and services.
This would lead to savings of around £55m over the next three years, the authority said.
The council said the changes would be subject to consultation with affected staff and trade unions.