Scandal of 5m on less than the living wage

Shock study reveals that 4.8m people earn too little to meet basic standards

Britain's worst double-dip recession since the 1950s has left a fifth of all workers struggling to get by on less than the living wage, a major report to be published today will reveal.

Almost five million workers are being paid less than the amount considered necessary to afford a basic standard of living – £8.30 an hour in London, and £7.30 outside the capital.

Care workers, bar staff, waiters and retail staff on low incomes have been hit hardest by the downturn, the report, commissioned by accountancy firm KPMG, found.

The research is being published ahead of Living Wage Week, which starts on November 4 and will see new rates announced for London and the rest of the country.

A number of employers have voluntarily adopted the independently calculated standards, which compare with the statutory national minimum wage of just £6.19 an hour.

But that has been dismissed as hopelessly inadequate by campaigners, who report low-paid workers across Britain are bearing the brunt of a brutal double-dip recession that has been characterised by a squeeze on incomes combined with rising taxes and high levels of inflation.

The study, carried out by Markit on behalf of accountancy giant KPMG, reported bar staff, restaurant workers, catering and retail staff had been worst affected by the downturn. Official figures showed that the UK economy roared back in the last quarter, surprising economists with growth of 1 per cent after a bleak first half of the year.

But any benefits are evading those earning low incomes in the UK, the report showed, with four in 10 low-paid workers admitting their finances are worse now than they were just a month ago. That compared with just 25 per cent of workers on incomes above the level. By proportion of the population, Northern Ireland has the highest level of people earning wages beneath the living wage level, closely followed by Wales (23 per cent). London and the North West are the highest by number with 570,000 each.

Some 38 per cent of respondents below the living wage say they have poorer cash availability now than a month ago, compared with 27 percent of those earning above, indicating that the recovery is failing to benefit those most in need.

TUC general secretary-designate Frances O'Grady called on companies to adopt the standard describing the figure of one in five workers surviving below it as "shocking".

She added: "The living wage is not a luxury, and means that low-paid workers don't have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children," she said. "Now more than ever is the time for employers to put an end to poverty pay."

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 encouraging to see nearly 100 organisations now signed up and accredited. But that still leaves many more organisations that aren't."

Marianne Fallon, head of corporate affairs at KPMG, said there were sound business reasons for adopting the standard including "improved motivation and performance" together with "lower leaver and absentee rates among staff in receipt of a living wage" offsetting the extra costs of paying it.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power