Five million people 'struggle for living wage'

More than five million people in the UK earn less than a low pay threshold, highlighting the huge level of wage inequality in the country, according to a new report today.

The TUC said many workers have to put in long hours to earn enough money to meet their basic needs as it launched a report on the "quest" for a living wage.

The study showed that 5.3 million people - more than a fifth of all employees - fall below a low pay threshold put at £6.75 an hour for a single person, almost £1 more than the national minimum wage of £5.80.

The number of people falling below the threshold is one of the highest in Europe, hitting the economy and fuelling wage inequality, said the report.

Since 1997, the poorest 10% of households have seen their weekly incomes fall by £9 a week and as real wages have fallen, the gap between what workers earned and what they needed had increasingly been filled by debt, said the report.

The TUC warned that some bosses were using the current economic problems as a "smokescreen" to freeze the pay of workers.

TUC deputy general secretary Frances O'Grady said: "The living wage campaign has made enormous strides since 2001, taking thousands of families out of poverty and helping to boost fragile local economies in cities that have adopted living wage policies.

"Government ministers, public authorities, businesses and the City have seen the moral and practical benefits of paying a living wage. This is not a luxury in a time of economic downturn, but the key to building a fair, equitable and sustainable recovery."

Ben Whittaker of the National Union of Students said: "It is very hard for anyone looking for a job at the moment and many people, particularly graduates and other young people, are being asked to work for low pay in order to get experience in their chosen field.

"It is vital that employers pay a living wage to all their employees so that everyone can earn enough money to pay for essential goods and services."

The report pointed out that a number of organisations were now paying a "living wage", including Manchester City Council, its directly employed staff are on a minimum rate of £6.74 an hour, which has raised the pay of 800 workers.

* The national minimum wage will increase next month from £5.80 to £5.93 an hour for workers aged 21 and over, from £4.83 to £4.92 an hour for workers aged 18 to 20 and from £3.57 to £3.64 an hour for workers aged 16 to 17.