Tag: low pay

Almost half a million workers to benefit from Living Wage boost

LIVING WAGE MOVEMENT CONTINUES TO GROW

  • Almost half a million Living Wage workers are set for a pay boost as over 15,000 Living Wage Employers are signed up to pay the new rates 
  • The real Living Wage is the only UK wage rate independently calculated based solely on the actual cost of living and is different from the government’s National Living Wage, which is the legal minimum employers must pay for over-21s 
  • The new real Living Wage rates are now worth over £2,262 more per year in the UK than the legal minimum, and over £4,700 more in London  
  • Nearly £3.5bn in extra wages has gone to low paid workers since 2011 

The Living Wage Foundation has revealed that the Real Living Wage will increase to £12.60 next year.

Almost half a million people working for more than 15,000 real Living Wage Employers throughout the country are set for a vital cost-of-living pay boost, as the real Living Wage rates rise to £12.60 an hour across the UK (60p or 5% increase), and £13.85 an hour in London (70p or 5.3% increase). 

Recent research by the Living Wage Foundation shows that despite inflation easing, many of Britain’s 3.7m low paid workers are still struggling with the impact of years of high prices, with 42% having less than £10 left each week after covering essential expenses, 39% having used a food bank in the past year and 32% have skipped meals for financial reasons. 

The real Living Wage vs the ‘National Living Wage’ – the difference 

The real Living Wage is different to the government’s minimum wage rate, which for those over the age of 21 is often called the “National Living Wage”. It is a higher, voluntary rate that is independently calculated based solely on the actual cost of living. The Government’s rate is the legal minimum businesses are required to pay by law.    

The real Living Wage applies to all workers over the age of 18 working for a Living Wage Employer and is £12.60 an hour. The ‘National Living Wage’ applies to those over the age of 21 and is worth £11.44 an hour.  

A full-time worker earning the new, real Living Wage would earn £2,262 a year more than a worker earning the current government minimum (NLW), and £1,170 more than their current pay. In London, a full-time worker on the new real Living Wage rate would earn an additional £4,700 a year compared to a worker on the current NLW, and £1,365 more than their current pay.  

Despite the economic challenges, in the past three years record numbers of employers have signed up to pay the real Living Wage, including to their third-party contractors like cleaners and security guards, with 1 in 9 employees now working for an accredited Living Wage Employer.  

There are now over 15,000 Living Wage Employers, with recent accreditations including Pieminister, Fred Perry and the National Theatre. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Ikea, Burberry and LUSH as well as thousands of small businesses, who are choosing to pay the real Living Wage to provide workers and families with greater security and stability. 

There are now 180 Living Hours Employers, including abrdn, Aviva, and West Brom Building Society, going beyond payment of the real Living Wage to also provide a guaranteed minimum of 16 hours work a week, a month’s notice of shift patterns and a contract that reflects hours worked.  

Over 50 employers who want to ensure their workers never face poverty in retirement are signed up to the Living Wage Foundation’s Living Pension accreditation. Living Pension Employers provide a Living Pension savings level using either a cash (£2,950) or percentage (12%) target, with a minimum of 7%, or £1,720, contribution coming from the employer. 

Katherine Chapman, Living Wage Foundation Director, said: “Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices.

“The real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates announced today will make a massive difference to almost half a million workers who will see their pay increase. 

“It’s a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace. This year, we reached the major milestone of 15,000 accredited Living Wage Employers – with half of them signing up since 2021.

“Employers who want to go beyond the Government’s minimum wage and ensure their workers are paid in line with the real cost of living can look to these leading employers and accredit with the Living Wage Foundation.”

The City of Edinburgh Council is a Living Wage employer.

Responding to the news, Councillor Jane Meagher, Housing, Homelessness and Fair Work Convener, said: “Thousands of workers across Edinburgh are set for a boost in pay from May thanks to the new Living Wage rate.

“Helping our city’s workers as the cost of living soars, the rate set by the Living Wage Foundation will rise by 60p to £12.60 an hour across the UK.

“Too many people in our city have been pushed into deprivation because of insecure work. It really can happen to any of us and that is why the Living Wage is such a powerful tool for making sure people are paid fairly for their work.

“Considering the increasing pressures businesses are also under, we are so appreciative of the way Edinburgh employers continue to lead the way in Scotland, making Living Wage the norm.”

The city council is supporting calls for fairer pay in local government.

Following agreement by the Policy and Strategy Committee, the Council Leader will write to the Scottish and UK Governments requesting new funding for local councils to support a pay award for all workers, in line with calls from trade unions.

Council Leader Cammy Day said: “There are 80,000 people living in poverty in Edinburgh and because of the soaring cost of living, in-work poverty is rising. One of the most effective ways we can prevent hardship is to provide people with a fair day’s pay for a fair day’s work.

“We have close to 20,000 Council workers keeping our city clean, safe and moving and we’re calling on Government to properly and fully fund a fair pay award for each one.”

TUC – number of people in insecure work reaches record 4.1 million

1 in 8 workers now in employment that offers little or no security, says union body

  • Insecure work has risen nearly three times faster than secure forms of employment since 2011, analysis shows 
  • TUC accuses Conservatives of presiding over a “race to the bottom” on employment standards 
  • Union body says New Deal for Working People urgently needed 

The number of people in insecure work has reached a record high of 4.1 million, according to new TUC analysis. 

The analysis of official statistics shows the number of people in precarious employment – such as zero-hours-contracts, low-paid self-employment and casual/seasonal work – increased by nearly one million between 2011 and 2023. 

Over that period insecure work rose nearly three times faster than secure forms of employment. While the numbers in insecure work increased by 31%, those in secure employment increased by just 11%. 

The TUC estimates that 1 in 8 workers in the UK are now employed in precarious employment. However, in some parts of the country, such as the West Midlands and the South West, this number has risen to 1 in 7. 

Low-paid industries have fuelled most of the growth 

The growth in insecure work since 2011 has been fuelled mainly by lower-paid sectors of the economy. 

In care, leisure, service occupations and elementary occupations the number of people in precarious employment has rocketed by over 600,000 (+70%) since 2011. 

Insecure work pay penalty 

Today’s analysis also shows that people in insecure work face a severe pay penalty compared to other workers. 

People on zero-hours contracts earn over a third (35%) less an hour, on average, than workers on median pay. 

And the pay gap between workers in seasonal (-33%) and casual (-37%) work and median earners is also stark. 

New Deal “urgently needed” 

The TUC says the huge rise in insecure and low-paid work highlights the need for boosting workers’ rights and making work pay. 

The union body says Labour’s New Deal for Working People would be a “game changer” if delivered in full – with the biggest upgrade in workers’ rights in a generation. 

In April the Chartered Management Institute polling of managers revealed strong support for key New Deal policies:   

  • More than 4 in 5 (82%) managers said granting workers fundamental day one rights was important.   
  • 3 in 4 (74%) managers said a ban on zero-hours contracts was important, and 
  • 3 in 4 (74%) managers said the publication of ethnicity and disability pay gaps was important. 

The polling also revealed that 80% managers believe workers’ rights should be a top priority in national policies, while 83% said such changes can positively impact workplace productivity. 

TUC General Secretary Paul Nowak said: “We need a government that will make work pay. But over the last 14 years we have seen an explosion in insecure, low-paid work. 

“The UK’s long experiment with a low-rights, low-wage economy has been terrible for growth, productivity and living standards. 

“Real wages are still worth less than in 2008, and across the country people are trapped in jobs that offer little or no security.” 

On the need for change, Paul added: “We must end the Conservatives’ race to the bottom on employment standards.  

“The New Deal is an opportunity for a reset. Delivered in full – it would be a game changer for millions of working people. 

“As well as preventing workers from being treated like throw-away labour it would stop good employers from being undercut by the bad.” 

If delivered in full Labour’s New Deal will:  

  • Strengthen collective bargaining by introducing fair pay agreements to boost pay and conditions – starting in social care.   
  • Introduce ethnicity pay gap reporting and disability pay gap reporting.   
  • Ban zero-hours contracts to help end the scourge of insecure work.  
  • Give all workers day one rights on the job. Labour will scrap qualifying time for basic rights, such as unfair dismissal, sick pay, and parental leave.   
  • Ensure all workers get reasonable notice of any change in shifts or working time, with compensation that is proportionate to the notice given for any shifts cancelled or curtailed.  
  • Beef up enforcement by making sure the labour market enforcement bodies have the powers they need to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights. 

Cash-strapped Christmas 

British frontline workers worse off than European peers, despite clocking up more hours

  • Study finds 51% will go into debt to pay for Christmas 
  • 43% feel there’s ‘too much pressure to spend’ during the festive season

Brits are feeling the pinch more than their overseas counterparts, with 56% saying their wages barely cover living expenses compared to 39% of Germans, 31% of Nordic workers (Sweden, Denmark, Norway and Finland) and 29% of Dutch contemporaries.

That’s according to a first-of-its-kind study by global workforce management provider, Quinyx. It polled over 3000 shift and non-desk-based workers in the retail, fashion, wholesale, shipping, distribution, warehousing and logistics industries to gain a fuller understanding of how the cost-of-living crisis is affecting employees in Europe. 

Despite respondents across all countries working more hours in 2023 compared to previous years – peaking at 46% in the UK and The Netherlands, many had to accept help to cover the cost of everyday essentials. 

Around two in five (39%) workers in The Netherlands received financial support from family and friends to pay the bills (31% in the UK), while more than a quarter (26%) of those surveyed in the Nordics and Germany turned to food banks (11% in the UK).

With Christmas only weeks away, apprehension around the cost and associated pressures at home and work are mounting in the UK and overseas.

More than half of Brits (51%) will be getting into debt this festive season – a sentiment echoed in the Nordics (58%), 29% are dreading Christmas because of the cost, felt by 32% and 26% of Nordic and Dutch respondents respectively, and 43% think there’s too much pressure on people to spend money at Christmas.

However, it’s not all bah humbug! 41% surveyed in the UK said it makes them happy when they see people spending lots of money on seasonal gifts and activities – as Christmas is a time to be enjoyed, and 39% like working in December because of the festive cheer.

Toma Pagojute, Chief HR Officer at Quinyx, says: “Beyond the excitement and merriment of the holidays, many frontline workers – everyone from delivery drivers and waiting staff to warehouse operatives and retail assistants, are faced with increased workloads and insurmountable financial challenges.

“And as our study proves, the UK isn’t alone in that – the cost of living is proving a burden in Europe too. 

“So, what’s the best gift business leaders can give our dedicated workforce on the frontline this year? Engage with them, listen, and provide support when and where they need it the most. This can be through flexible work schedules, improved communications and by ensuring their working conditions are the best they can be.”

Download the country comparison study breakdown: https://www.quinyx.com/2023-cost-of-christmas 

Infographic-Frontline-Worker-Christmas-Campaign-Europe-wideDownload

Number of workers on universal credit up by 1.3 million since the eve of the pandemic

  • 130% rise in working claimants during the pandemic 
  • Low-income workers facing “perfect storm” this spring unless ministers improve “woefully inadequate” levels of support, warns union body 
  • Cost-of-living crisis already depressing value of UC, TUC analysis reveals 
  • *NEW POLL* shows many families already struggling to make ends meet 

The TUC has warned that millions of low-income workers face a “perfect storm” this April with universal credit (UC) falling behind the cost of living as energy bills and taxes rise. 

The warning comes as new TUC analysis reveals that the number of workers on UC has increased by 1.3 million since the eve of the Covid-19 pandemic. 

The analysis of official statistics shows that over 2.3 million workers were in receipt of UC at the end of 2021, compared to just over one million on the eve of the pandemic in February 2020. 

This represents an increase of 130 per cent over the last two years and means 1 in 14 (7.2 per cent) working adults now claim UC. 

The TUC says the huge rise in UC recipients has been driven by working households being pushed into financial hardship during Covid, with millions facing a cost-of-living crunch this year. 

Basic value of universal credit now lower than at start of pandemic 

The TUC says that the basic value of UC is now lower than at the start of the pandemic as a result of UC not keeping up with inflation. 

TUC estimates show that the value of UC has fallen by £12 a month in real terms when measured against CPI inflation and £21 a month when measured against RPI inflation compared to just before the pandemic (February 2020).  

The TUC says this trend will only get worse in the months ahead with inflation forecast to rise further. 

Struggling to cover the basics 

The TUC warns that millions of low-paid families face a crunch point in April when energy bills and national insurance contributions go up – at the same time as UC continues to fall in value. 

New polling – carried out for the union body before last week’s energy cap announcement and Bank of England forecasts – shows that many are already struggling to make ends meet: 

  • One in eight workers (12 per cent) say they will struggle to afford the basics in the next six months. And a fifth of working people (22 per cent) say they’ll struggle to afford more than the basics. 
  • Low-paid workers are more likely to be struggling. One in six (17 per cent) low-paid workers (those earning less than £15,000 a year) say they will struggle to afford basics in the next six months, and three in 10 (29 per cent) say they’ll struggle to afford more than the basics. 

Parents of young children, disabled workers, key workers and BME workers are more likely to be struggling: 

  • Nearly one in five families (18 per cent) with kids under 11 will struggle to afford the basics 
  • Over one in five (21 per cent) disabled workers will struggle to afford the basics, compared to 10 per cent of non-disabled workers 
  • 14 per cent of key workers say they’ll struggle to afford the basics in the next six months, compared to 10 per cent of non-key workers 
  • 14 per cent of BME workers say they’ll struggle to afford the basics in the next six months, compared to 11 per cent of white workers 

The poll also reveals that a fifth of workers (21 per cent) say they have Christmas debts to pay off this year – a number that rises to over a quarter (28 per cent) for workers with children of school age. 

Better support needed 

The TUC says the government must do far more to help struggling households to get through the months ahead. 

The union body says the cost-of-living support announced by the Chancellor on Thursday is “woefully inadequate” and will provide families with just £7 extra a week – most of which will have to be repaid. 

The TUC is also calling for UK Government to use the upcoming spring budget to: 

  • Increase to UC to 80 per cent of the real Living Wage. 
  • Introduce a windfall tax on energy companies, using the money to reduce household energy bills 
  • Boost the minimum wage to least £10 an hour now 
  • Work with unions to get pay rising across the economy 

TUC General Secretary Frances O’Grady said: “Millions of low-paid workers face a perfect storm this April.  

“At the same time as energy prices and national insurance contributions shoot up, universal credit is falling in value. 

“The government must do far more to help struggling families get through the tough times ahead. The support package announced by the Chancellor last week is woefully inadequate. 

“Universal credit urgently needs boosting and we need further action to reduce fuel costs for those battling to make ends meet. 

“Oil and energy companies shouldn’t be making bumper profits, while many struggle to heat their homes. 

“If ministers fail to do what is necessary, more households will be pushed below the breadline.” 

On the need to boost pay, Frances added: “The best way to give working families long-term financial security is to get pay rising across the economy. 

“That means increasing the minimum wage to at least £10 an hour now, and ministers requiring employers to negotiate sector-wide fair pay agreements with unions.” 

Real Living Wage increases to £9.90 as cost of living rises

  • Over 300,000 Living Wage workers are set for a pay boost  
  • More than £1.6 billion in extra wages has gone to low-paid workers since the start of the Living Wage movement 20 years ago 
  • £613 million in extra wages has gone to low-paid workers since the start of lockdown, with a record number of employers signing up – over 3,000 since the pandemic began  
  • Greater London Authority and Greater Manchester Combined Authority are today making announcements on their progress to becoming Living Wage City Regions 
  • Despite these successes, 4.8 million employees (1 in 6 workers) are still paid below the Living Wage, with those from racialised groups1 more likely to be paid below the Living Wage than white workers (19.4% compared to 16.3%).  

Over 300,000 people working for almost 9,000 real Living Wage Employers throughout the country are set for a vital pay boost as the new Living Wage rates rise to £9.90 across the UK (40p increase), and £11.05 in London (20p increase), supporting workers and families.

The Living Wage rates are the only rates independently calculated based on what people need to live on.

This year the movement for a real Living Wage celebrates its twentieth year, with new research from the Cardiff Business School showing Living Wage workers have benefitted from more than £1.6bn in extra wages during this period. One in 13 workers now work for an accredited Living Wage Employer.  

The new Living Wage rates and the ‘National Living Wage’: know the difference 

Unlike the Government minimum wage (‘National Living Wage’ for over 23s – £8.91 rising to £9.50 in April) the real Living Wage is the only wage rate independently calculated based on rising living costs – including fuel, energy, rent and food.

A full-time worker earning the new, real Living Wage would earn £1,930 a year more than a worker earning the current government minimum (NLW). For a worker today that’s the equivalent of 7 months of food bills and more than 5 months’ rent based on average household spending in the UK.

Even on next April’s higher NLW rate of £9.50, a full-time worker on the real Living Wage would earn £780 more. 

In London, a full-time worker on the new real Living Wage rate would earn an additional £4,173 a year compared to a worker on the current NLW and £3,022 more than a worker on next year’s National Living Wage.  

The increase in Living Wage rates this year has largely been driven by rising fuel and rent costs.

The Living Wage movement continues to grow 

Major new Living Wage employers announced today include FTSE 100 construction firms Taylor Wimpey and Persimmon Homes, Fujitsu, food delivery company Getir, and Capita. They join half of the FTSE 100 companies, household names like Aviva, Everton FC, Burberry and Lush as well as thousands of small businesses, who are choosing to pay the real Living Wage to ensure all staff earn a wage that meets the real cost of living. More than 3,000 employers have now accredited with the Living Wage Foundation since the start of the pandemic. 

Metro Mayors in London and Greater Manchester have also today announced major new commitments to create Living Wage City Regions which could see thousands more pay rises.  

Looking globally, the Living Wage campaign also today launches Living Wage for US, the first coordinated national effort set up to ensure that workers across the United States are paid a real Living Wage. 

Low pay in the UK  

The announcement of the new rates comes as new research by the Living Wage Foundation has demonstrated the scale of low pay during the pandemic, with 4.8 million jobs (17.1% of employee jobs) still paying less than the real Living Wage.

Northern Ireland had the highest proportion of jobs paying below the Living Wage (21.3% or 236,000) and the South East the lowest (12.8% or 533,000). [4] 

Those from racialised groups were more likely to be low paid – with 19.4% of these workers earning below the LW compared to 16.3% of white workers.


Katherine Chapman, Living Wage Foundation Director, said: “With living costs rising so rapidly, today’s new Living Wage rates will provide hundreds of thousands of workers and their families with greater security and stability.  

“For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity. 

“Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners. 

“We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.” 

The Archbishop of York, the Most Revd Stephen Cottrell, said: “This Living Wage Week, the Living Wage Foundation has announced the new rates that cover what we all need to earn to get by.

“Their movement will see over 9,000 businesses elect to give their 300,000 workers not only what they need to survive, but to thrive as well.

“The principle behind the campaign for better pay and secure working conditions ought to be a pillar of our new society, and one I hope will be adopted by even more forward-thinking businesses as we look ahead to 2022.” 

Sarah Wadsworth, Fujitsu UK HR Director, said: “I am delighted that Fujitsu have signed as a Real Living Wage employer. This long-term commitment is not only the right thing to do for our employees but also ensures that our suppliers and partners are also planning to align to this for their employees.

“Fair pay for all employees continues to be relevant for our business as well as the benefits it brings to wider communities.” 

Anne Billson-Ross, Taylor Wimpey Group HR Director, said: “This voluntary commitment is a fantastic example of the direct action we are taking to ensure we remain an employer of choice, committed to do the right thing by our employees, suppliers and subcontractors.” 

Dean Finch, Group Chief Executive of Persimmon Homes, said: “I want all our employees to feel valued and fairly paid for the good work that they do. Paying the real Living Wage is an excellent way of demonstrating this. I am therefore delighted we have become a Living Wage Foundation accredited employer and joined what is an important campaign.”  

Kim Coles, Finance Director at Lush, said: “At Lush we are committed to a fair wage at all levels of the business and fully support the UK Living Wage Foundation’s approach of a hard day’s work deserving a fair day’s pay.

“We have been paying the London Living Wage since 2011 and paying all UK staff at or above the “real” hourly Living Wage rate since April 2017. We continue to commit to the rate in tough times because that is when our people need it the most, and it’s the right thing to do.

“Lush staff are crucial to our success, and they work incredibly hard making and selling our products. Having an independently calculated real living wage rate means that we have a positive step towards staff being able to afford what they need to thrive, not just survive.

“It also means that the same fair trade commitment we make to our ingredient suppliers is made to our staff and that we can be confident their rates of pay are fair and increase in line with real living costs.”   

Turancan Salur, General Manager at Getir, said: “At Getir we pride ourselves on being a great employer. As well as paying all our colleagues at least the real Living Wage, with the opportunity to earn more through bonuses, we provide pensions, sick pay, paid leave, insurance and all PPE and electric delivery vehicles. 

“It is only right and fair that we do this as our workforce is the most important part of our business and we fully support the Living Wage Foundation for promoting such an important issue.”    

Ryan, a Living Wage worker at COOK Food, said: “Before joining COOK I’d worked in a pub for two years. I was on minimum wage and I was working at least 50 hours a week to pay the rent. Even though I was working so hard, I started to get in debt. My relationships suffered, and it started to affect my health both mentally and physically. 

“However, since coming to COOK, being paid the real Living Wage made all the difference. I could work only 40 hours a week and take home more than when I was working 50 or 60 hours at the pub. 

“Gradually my mental health improved, and I also started to live more healthily. I lost 30kg because I actually had the time and money to make real food, eat properly and exercise. My relationships improved as I had time to spend with my friends and made new friends at COOK, too.” 

Commenting on the Living Wage Foundation figures which show that one in six workers are earning under the real Living Wage, TUC General Secretary Frances O’Grady said: “Every worker should be able to afford a decent standard of living.  

“But these new figures from the Living Wage Foundation show that low pay is endemic in modern Britain. Millions are in jobs that don’t pay the bills or put food on the table. 

“After eleven years of Conservative government, real wages are only just getting back to their 2009 level. And the Budget revealed we face another half decade of wage stagnation.  

“With Britain in the middle of a cost-of-living crunch, it’s time for the government to act. 

“Ministers must start by increasing the minimum wage to £10 immediately, banning zero hours contracts and giving trade unions greater access to workplaces to negotiate improved pay and conditions.  

“That‘s how we get wages rising for everyone.” 

Budget Briefing: Wage boost for millions of low-paid workers

  • The UK’s lowest-paid workers will receive a pay rise next year as the National Living Wage increases from £8.91 to £9.50 an hour – an extra £1000 a year for a full-time worker.
  • From 1 April, young people and apprentices will also see their wages boosted as the National Minimum Wage for people aged 21-22 goes up to £9.18 an hour and Apprentice Rate increases to £4.81 an hour.
  • This builds on the government’s continued action to support people with the cost of living including through the £500 million Household Support Fund, Energy Price Cap, Seasonal Cold Weather Payments and Warm Homes Discount, and keeps the government on track to meet its target to end low pay by 2024-25.

MILLIONS of the UK’s lowest paid workers will benefit from a pay rise next year, as the UK government takes further action to help the country’s poorest households.  

The Chancellor is expected to confirm at Wednesday’s Budget and Spending Review that the National Living Wage will increase from £8.91 to £9.50 an hour – a 59p an hour boost which means a full-time worker on the National Living Wage will see a pay rise of more than £1,000 a year.

The National Living Wage was introduced in 2016 and sets the minimum hourly pay a person over the age of 23 can earn when working.

Rishi Sunak is also set to announce a wage rise for young people under the age of 23. For those aged 21-22 the National Minimum Wage rate increases to £9.18 an hour, up from £8.36 – a 82p increase.

With apprenticeships a key part of our Plan for Jobs, the minimum hourly wage for an apprentice will also see a boost next year, with an 18 year old apprentice in an industry like construction seeing their minimum hourly pay increase by nearly 12%, going from £4.30 to £4.81 an hour.

Chancellor of the Exchequer Rishi Sunak said: “This is a government that is on the side of working people. This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament.” 

By introducing these changes, which are broadly consistent with previous increases, the government accepts all recommendations made by the Low Pay Commission – an independent advisory board which brings together economists, employer and employee representatives.

“The government remains committed to meeting its ambitious target of a National Living Wage of two-thirds of median earnings and expanding it to include workers over the age of 21 by 2024, provided economic conditions allow.

Since 2010, this government has continuously supported working people on the lowest wages – doubling personal tax thresholds, doubling free childcare for eligible working parents – worth up to £5,000 per child per year. It has also expanded Free School Meals to all five to seven-year-olds – saving families £400 a year.

This builds on recent action to support the lowest earners in the winter months, through measures like the £500 million Household Support Fund to help families with their food and utility costs, the Energy Price Cap, Seasonal Cold Weather Payments, and the Warm Homes Discount to ensure low-income households can keep their homes warm over the winter period.

As we enter the next stage of the Plan for Jobs, an extra £500m will also be invested to give people the skills and support they need to find good work as we build back better from the pandemic.

Companies bidding to win Scottish Government contracts must pay the real Living Wage

Companies bidding to win Scottish Government contracts will have to pay the real Living Wage, ministers have announced.

This will ensure public sector contracts tackle in work poverty and promote fair work practices across the public, private and third sector where there is a risk of low pay.

The real Living Wage has been consistently higher than the UK National Living Wage and helps create an inclusive and fair economy for all.

Business Minister Ivan McKee said: “We want to use every opportunity possible to promote fair work and ensure people are paid at least the real Living Wage. By using procurement powers to ensure bidders pay the real Living Wage, the Scottish Government is leading by example to help influence employment practices and embed fair work principles.

“We will continue to engage with relevant sectors to encourage others to adopt this change across the public, private and third sector. We are firmly focused on creating the right economic conditions and fair work practices to drive a greener, fairer and more sustainable economy.”

Fair Work Minister Richard Lochhead said: “As outlined in our Programme for Government, a range of measures are being taken forward to embed Fair Work First across the economy. 

“The Scottish Government recognises pay as a clear way that an employer can demonstrate a commitment to their workforce, helping tackle in-work poverty alongside wider Fair Work First criteria.

“We will also introduce further changes to strengthen criteria for Scottish Government grants from next summer, subject to limits on devolved competence, as part of the Cooperation Agreement with the Scottish Green Party.

“The number of accredited living wage employers has increased from 14 in 2014 to just over 2,300 in 2021 and we would encourage more businesses to sign up to help ensure more people see their pay uplifted to at least the real Living Wage. We encourage organisations, regardless of size, sector or location, to adopt our progressive fair work approach which will help ensure all staff receive a fair day’s pay for the work they do.”

The Fair Work Convention Co Chairs Professor Patricia Findlay and Grahame Smith welcome the announcement from the Scottish Government on introducing a requirement to pay the real Living Wage to public contracts.

Commenting on the announcement, Professor Patricia Findlay said: “The Fair Work Convention welcomes today’s announcement from the Scottish Government. Low pay is one of the key drivers of in-work poverty.

“All too often we find that disabled workers, BME workers, young workers and women in particular face precarious and low paid work, so addressing very low pay in public contracts can begin to support better outcomes for these and other workers.

“Pay is a crucial element of fair work, and for too long the obstacles to workers’ challenging and improving low pay in certain occupations and sectors have been considerable.  Given this, government action to help address low pay is necessary to deliver fair work as well as to deliver on equality and anti-poverty priorities.

Grahame Smith added: I’m delighted that the Scottish Government has accepted the Convention’s view that there is no legal impediment to making the payment of the real living wage a requirement of those in receipt of public contracts.

“While this decision is a significant step forward and will make a real difference for thousands of low paid workers, we will be exploring urgently how conditionality can be extended to all dimensions of fair work, particularly requirements around collective bargaining, union recognition and the adoption of all terms and conditions negotiated nationally between employers and unions.”

Fair pay for public sector workers?

Guaranteeing a fair deal for the public sector workforce and protecting lower-paid workers underlines the wellbeing focus of this year’s Scottish Budget, according to new Finance Secretary Kate Forbes – but local government trade union UNISON says care workers are being undervalued. 

Scottish Government policy decisions mean the starting salaries for staff in a range of public sector professions in Scotland are already higher than in England, including:
• a newly-recruited teacher will earn £26,697 in Scotland, compared to £24,373 in England
• a band 5 staff nurse will earn £24,670 in Scotland, compared to £24,214 in England
• a newly-recruited police officer will earn £26,037 in Scotland, compared to £20,880 – £24,177 in England

The 2020-21 Public Sector Pay Policy published alongside the Budget includes a range of measures to further support the public sector workforce:
• a guaranteed 3% pay uplift for public sector workers earning up to £80,000
• a cash uplift of £750 for public sector workers who earn £25,000 or less
• continuing the Scottish Government’s commitment to the real Living Wage, now set at £9.30 per hour
• limiting to £2,000 the basic pay increase for those earning £80,000 or more

Ms Forbes said: “Wellbeing and fairness are at the heart of this year’s Budget, and promoting the wellbeing of our public sector workers by protecting and increasing their pay is an important part of that.

“This pay policy responds to real-life circumstances, with measures to help us tackle inequalities by protecting the salaries of lower-paid employees. And of course investing in our hardworking public sector workforce will also help deliver top-class public services while supporting jobs and the wider economy.

“I am grateful for the engagement Ministers have had with the trades unions and others, and now hope Parliament will work with us to pass this Budget and reward our vital public sector workers.”

However Local government union UNISON says care workers are being treated unfairly and is campaigning to see better pay and conditions for these key public sector workers.

Christina McAnea, UNISON assistant general secretary, said: “For all the things that are wrong with the care system in this country, we have a workforce that are passionate and committed. They care desperately about the people they look after. That’s a fantastic place to start in trying to build a care system that works.”

But care workers are not treated fairly. Care is in crisis, thanks to a system that has been underfunded and ignored by governments for years. Care workers and the people that they look after are paying the price.

UNISON is campaigning for change and urges councils across the country to sign up to their Ethical Care Charter. The union is fighting to win:

  1. Decent jobs, including:
    • A real living wage
    • Full pay for sleep-in’s and travel time
    • Fair contracts, no zero hours
    • Enough time to care
    • A safe working environment
  2. Quality standards: A national framework for care, with pay and training linked to standards.
  3. Fair funding: We are building political alliances and public support to get the right solutions for care workers and care users.

Local government umbrella body COSLA says the Scottish Government draft budget falls far short of what it considers a fair settlement for the country’s councils. 

COSLA says the draft budget results in a £95m (£300m real terms) cut to revenue and £117m (£130m real terms) cut to capital budgets.  The impact of these cuts will continue to be felt.  This budget does not recognise the vital role Local Government plays in the economy across Scotland.

COSLA Environment and Economy Spokesperson Councillor Steven Heddle said:  “Councils campaigned strongly for an increase in funding so that we can continue to develop local economies that provide fair and accessible work opportunities for everyone.

“Regretfully, the Government has again ignored these warnings and failed to recognise the unique role councils play in growing local economies.

“We are the main employer in almost every local authority in Scotland providing a tenth of Scotland’s workforce. If any other part of the economy was facing the risks we are, the Government would step in.

“When councils have the money to invest in capital projects, the benefits are felt across communities – from training and apprenticeships to support for local supply chains – this year’s Capital Budget will mean these benefits will all be lost.

“Less core revenue funding for economic development support, planning and regulation will also hit communities hard.

“We are calling on the Government and the Parliament to address these concerns, listen to our asks and prevent the loss of essential council services which communities rely upon.”

“Broken economy” is driving record levels of household debt, warns TUC

Low pay, insecure work and austerity are feeding a growing debt crisis, the TUC has warned.

New TUC analysis published today shows that:

  • Unsecured debt per household rose to £15,880 in the first quarter of 2019, up £1,160 on a year earlier.
  • Over half of households report having unsecured debt, most commonly in the form of credit card debt (60%), overdraft (28%), personal loans (25%) and car finance (25%).
  • Young people are disproportionately likely to be in debt. 70% of 18-34 year-olds report having a type of unsecured debt. This drops to 33% among people over 65.

The TUC believes that persistent low pay is the key driver of household debt. Real wages are still lower than they were before the 2008 crisis and working families are struggling to make ends meet without going into the red.

The latest analysis also shows that of those households with unsecured debt:

  • 1 in 5 say repayments are a “heavy burden on their finances”.
  • 1 in 7 (14%) have fallen more than two months behind on repayments in the last year.
  • 45% don’t feel that they have enough money set aside for emergencies.

TUC General Secretary Frances O’Grady said: “Our broken economy is forcing working families deep into debt.

“Low pay, insecure work and austerity have pushed millions of households to the financial cliff edge. Big corporations are raking in huge profits at working people’s expense. And successive governments have done nothing to avert the crisis.

“It’s time to reset the balance of power in our workplaces and our economy. Government must make more employers negotiate pay and conditions with unions. That will lift wages for everyone and stop working families having to rely on credit cards and overdrafts to get through the month.”

The TUC has published new proposals to ensure that workers get the chance to negotiate better pay and conditions through trade unions. These include:

– unions having access to workplaces to tell workers about the benefits of trade union membership, following the model in New Zealand

– new rights to make it easier for unions to gain the right to negotiate at workplace level

– new rights for unions to negotiate right across sectors, starting with hospitality and social care

The TUC is also calling for:

  • a £10 National Minimum Wage to be introduced as quickly as possible
  • a ban on zero-hours contracts, and a crack down on insecure work that means people don’t know how much they’ll earn from one week to the next