The minimum national living wage has increased today by 4.9% across all age brackets, and will largely benefit women, yet for the millions of people dependent on it, it still falls short of what employees need to get by. This comes after new data shows that near 3 million children are living in poverty despite having parents in work.
What has the minimum wage gone up to?
Rising from £7.83 to £8.21 for workers over 25, the national living wage increase today comes alongside National Price Hike Day, so-called as April 1 is when bills, such as council tax, increase more than inflation and gas and electricity costs going up after a cap on prices was lifted. According to The Living Wage Foundation, employees on the new living wage are £1,540.50 worse off a year than if the living wage was increased to their standard.
What is a living wage?
Based on what employees and their families need to cover the average costs of household food and drink, gas and electricity and private rents, the amount people should be earning to meet their basic needs would take employees an extra 5 weeks of work per year to earn on the current living wage. With women making up 60% of the employees on the national living wage, this amounts to one third of all working women in the UK not being able to earn a wage they can live on.
With 3.4 million women, compared to 2.1 million men, struggling to make ends meet, earlier this year the Living Wage Foundation found that 42% skip meals for financial reasons. The organisation is therefore calling on private businesses to go beyond the government's new increase.
‘Today’s increase in the government minimum wage will provide a welcome boost to low pay workers. But around 6 million workers still earn less than the real Living Wage and struggle to keep their heads above water,’ said Katherine Chapman, director of the Living Wage Foundation.
‘Many are unable to afford even the basics like decent family meals, or a warm and safe home. Over 5,000 responsible employers have gone beyond the government minimum and committed to pay a real Living Wage. We now need to see more businesses step up a provide a wage that truly covers the cost of living.’
Given that women are more likely to be in low-paid work, the Fawcett Society also revealed last year that increasing the minimum wage to the real living wage would help combat the gender pay gap.
'Women are much more likely to be in low paid work. Often that might be because they need flexibility or part time work to meet caring responsibilities that they just can’t find in better paid roles,' said Jemima Olchawski, head of policy and Insight at the Fawcett Society, 'It’s also because society undervalues women and the work they do; jobs dominated by women such as caring roles are consistently amongst the lowest paid.
'Employers can help lift their staff out of poverty and close the gender pay gap by paying the real Living Wage,' she continued, 'To maximise the talent available to them recruiters should make all jobs flexible by default, so a wider range of people can progress at work. We’d urge larger employers to take the opportunity of pay gap reporting to look closely at the nature and causes of the gap in their organisation and make an action plan to close it.'
The problem is more acute London, with full-time workers on the living wage needing to earn £4,563 more a year to meet basic needs, according to the Living Wage Foundation. Employees in London would need to work well over two months extra to make up the difference.
At a time when 70% of all poor children are in working families, according to the National Housing Federation, April 1st marks the day that we need a better national living wage more than ever.