Businesses prepare to adjust to Living Wage
Thousands of businesses and public sector organisations that have committed to paying at least the Living Wage will needed to raise this to £7.85 – or £9.15 in London.
Set by the Living Wage Foundation, the new rate is regarded by the body as the minimum necessary to maintain an acceptable standard of living. It is 21 per cent more than the minimum wage, which was recently raised from £6.31 an hour to £6.50.
The new wage has also been raised by 2.6 per cent on last year, which is more than double the current cost of living increase over the past 12 months of 1.2 per cent.
Over 1,000 organisations accredited by the Living Wage Foundation will make adjustments to fulfil their commitment to paying the figure, with around 35,000 workers set to gain.
Director of the foundation Rhys Moore said: “As the recovery continues[,] it’s vital that the proceeds of growth are properly shared. It’s not enough to simply hope for the best. It will take concerted action by employers, government and civil society to raise the wages of the five million workers who earn less than the Living Wage.”
However, he noted, the number of employers prepared to pay the Living Wage has “more than doubled” during the course of 2014. Among these have been a number of FTSE 100 companies, with the likes of Canary Wharf Group and Standard Life helping to take the number of Living Wage payers among this elite group from four to 14 this year.
Other major employers who pay the Living Wage include Nationwide, KPMG and the Bank of England.
This figure may reflect the greater confidence companies might have in the economy, leading them to regard the risk to their corporate wellbeing from the higher wage bill as being low.
Earlier this year, the government argued that the minimum wage should rise to £7 an hour. It is set by the Low Pay Commission, which makes its own independent decision after receiving submissions from various interested parties.
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