Low pay timebomb

ONE in five workers in East Anglia - and the UK as a whole - are being paid less than a living wage, according to a report by accountants KPMG.

The firm found that in Suffolk, 61,000 are on less the the Living Wage, a voluntary rate of pay adopted by some employers of �7.20 an hour outside London, or �8.30 in it, a study has found.

Suffolk’s total working population is 295,000, which means 21% fall below the benchmark.

In Essex the study estimates that 76,000 are working at below Living Wage threshold, versus a total working population of 522,000, equating to 15%.

In Norfolk, the situation is worse, with 82,000, or 25% of the working population of 322,000 earning below the Living Wage.

But Cambridgeshire fares better, with 14% of the working population, or 38,000, failing to reach the threshold.

In total in East Anglia, 199,000 people are earning below Living Wage - 20% of a total working population of 971,000.

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The research, commissioned by KPMG from Markit, provides one of the most comprehensive insights yet compiled into the Living Wage issue.

It combines analysis of the Office for National Statistics’ Annual Survey of Hours and Earnings with Markit’s own Household Finance Index survey.

Published ahead of Living Wage Week, which runs from November 4 to 10, the research reveals both the extent of sub-Living Wage employment and the effect it has on those low paid workers.

KPMG says in a difficult climate of rising prices, the study shows the impact of this is falling hardest on these low paid workers with more than four in 10 saying that their finances are worse now than they were just one month ago.

The Living Wage is some way above the national minimum wage rate of �6.19 an hour. The research indicates that since 2001, the Living Wage campaign has positively impacted over 10,000 employees and their families, and redistributed over �96 million to some of the lowest paid workers in the UK.

Northern Ireland has the highest proportion of people earning below the Living Wage at 24%, followed by Wales at 23%, the research found.

The sector with the highest proportion of workers earning below the Living Wage are bar staff at 90% and waiters and waitresses at 85%. At 780,000 people, sales and retail assistants make up the largest numerical group.

KPMG’s Marianne Fallon said: “This research really lays bare the extent of the problem of low pay in Britain. Times are difficult for many people, but of course those on the lowest pay are suffering the most. Paying a Living Wage makes a huge difference to the individuals and their families and yet does not actually cost an employer much more.”

“At KPMG, we have found that the improved motivation and performance, and the lower leaver and absentee rate amongst staff in receipt of a Living Wage means that the cost is offset and paying it is the right thing for our business.

“With Living Wage Week fast approaching, we would urge more big employers to consider paying their staff a wage that means they can afford a socially acceptable quality of life. We think it is the responsible thing to do.

“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.”

Rhys Moore, director of the Living Wage Foundation, said: “Paying a Living Wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country. It is really encouraging to see nearly 100 organisations now signed up and accredited. But that still leaves many more organisations that aren’t. We hope that Living Wage Week will create real momentum and that many more employers will sign up.”