Gavin Ryan has worked at Anchor Removals for 10 years, and said earning the living wage helped him move out of his mum’s house and into a home with his partner.
He described earning the rate as a “life saver” during the pandemic. “My partner Nic lost her job as a travel consultant and went to work for a supermarket,” he said. “Her hours and pay were not great, but because I was earning the living wage with guaranteed hours, I knew I could support her.”
For his boss, Chris Smallwood, it’s about acknowledging “the importance of a wage that values people”.
“I wanted to break this mentality that is endemic in my industry that it has to be tough. When I get up in the morning, I can look myself in the mirror knowing all the good things around me are not at the expense of other people, because I’ve paid them well”, he added.
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The new rates are now worth almost £3,000 more a year than the government’s national minimum wage, and almost £5,000 more in London. The hourly minimum wage for people aged 23 or above, which the government rebranded as the “living wage”, is £9.50. People aged 21 and 22 must receive at least £9.18 an hour, 18- to 20-year-olds at least £6.83, and 16- and 17-year-olds £4.81.
Charles Cotton, a senior adviser at the CIPD, the professional body for HR and people development, said the new rates “may not be enough to improve financial conditions for some of the lowest paid employees” during the cost of living crisis.
He said: “Employers should also consider other ways they can support employees’ financial wellbeing. As well as offering enough hours for staff to have a decent standard of living, organisations should review aspects of employment such as flexible working, career progression opportunities, and financial wellbeing benefits, for example occupational sick pay or hardship loans.”
He also questioned whether businesses would be able to afford to pay the new rates, as they too are suffering from significant cost increases including for energy.
“The most sustainable way for employers to pay more is through improved productivity”, he advised, adding: “This doesn’t mean forcing staff to work harder, but smarter. Employers should review how jobs, tasks and workplaces are designed to see where improvements can be made.”
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Around 7 per cent of all UK workers were paid at or below the minimum wage in April 2020, the Low Pay Commission has estimated.
“Today’s new rates will provide hundreds of thousands of workers and their families with greater security and stability during these incredibly difficult times,” said Katherine Chapman, LWF director.
“We are facing unprecedented challenges with the cost-of-living crisis, but businesses continue to step up and support workers by signing up to the Living Wage in record numbers. We know that the Living Wage is good for employers as well as workers, that’s why the real living wage must continue to be at the heart of solutions to tackle the cost-of-living crisis.”
Over half the people earning below the real living wage had to use a food bank in the past year according to the foundation’s research.
To receive accreditation from the LWF, employers must make sure all staff are paid the rate as a minimum, including contractors such as cleaning or catering staff.
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