News: 5 Million People Paid Below Living Wage

Photo by DanielMoyle

It has emerged that 5 million people in the UK are being paid below the living wage. The living wage is the hourly rate it would take for a worker to maintain a basic standard of living. It’s based on the cost of living, and stands at £7.20 throughout the UK, rising to £8.30 in London.

The National Minimum Wage, which is the legal amount employers must pay workers, is lower at £6.19 an hour.

In its report, accountancy firm KPMG found that bar staff and restaurant workers are the worst affected group, with 90% in the industry paid less than the living wage.

Frances O’Grady, the incoming general secretary of the TUC, said: “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.”

However, with many small businesses in particular struggling to pay workers even minimum wage, raising hourly pay to £7.20 or £8.30 is out of the question.

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.”

So, with the cost of running a business on the rise too, can you afford to pay your workers more than the legal rate?

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Kasey writes about the latest small business and website news for bOnline. Find Kasey on Google+, or follow bOnline on Facebook, Twitter, LinkedIn and Google+

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