Living Wage Increase

As every November, the Living Wage Foundation has announced the increase in rates for within and outside London. Increasingly, the foundation itself resorts to inserting the identifier, “Real” in front of “Living Wage”, to clarify that only this rate of pay is actually calculated to provide full-time workers with a wage that’s adequate for the essentials of a basic, decent lifestyle in modern Britain.

Most people I talk to are unclear about the difference between the Minimum Wage, the National Living Wage, and the (Real) Living Wage. No wonder, when those in power have deliberately created so much confusion.

Mentions of the so-called National Living Wage by Money Saving Expert, the website founded by Money Saving hero, Martin Lewis, often include the same quote; this year’s Spending Review news was no exception:

“When the national living wage was first announced, founder Martin Lewis blasted it as being “naughtily nicked” from the Living Wage Foundation to give “extra credibility” to the scheme despite not paying that amount. “

The fact is that the National Living Wage is not the Living Wage, it is simply the Minimum Wage for people over 25 (23 from April ’21) , and unless/until it catches up with the Living Wage, it isn’t enough to live on, and doesn’t deserve that name.

What fascinates me is that year on year, the Foundation reports the increase required to keep pace with the cost of living … while policymakers choose not to intervene to lower the costs of the essential items that are added up to work out what the Living Wage needs to be. In 2014, for the first time, a car became an essential household item if your household included any children, because public transport had become so a) absent and b) expensive. Doing something to improve public transport, making it more accessible and affordable, would reduce the cost of this household essential, lowering the amount that responsible employers need to pay in order to ensure their workers can afford a decent life.

Instead, the Foundation reports the increase in living costs, and employers agonise about whether they can keep pace with it or not. Conscientious local councils have had some respite from this worry over the last couple of years, since the pay floor agreed has been at (Real) Living Wage levels. Time will tell if this parity continues, or if the lowest public sector earners may slip back below the amount needed for a decent, basic standard of living.