Living Wage Foundation unveils pay rise for thousands of workers. Employers must do more to end poverty pay

New rates have just been unveiled for the wage, which results in better quality work, less absenteeism and better rates of staff retention

Studies show that paying people such as domestic cleaners minimum wage benefits employers too (Rex)

Unalloyed good news is hard to find at the moment but this week has started with some: more than 150,000 UK workers are going to get a pay rise.

They work for employers who have signed up to the voluntary living wage, which is based on the cost of living. What the Government likes to refer to as the “national” living wage is the rebranded minimum wage, and is based at least in part on what it thinks the market will bear.

The latter stands at £7.50, but is considerably less for young people. The voluntary version, by contrast, is paid to all workers at employers that sign up, and is set to rise by 30p an hour to £8.75, and by 45p to £10.20 in London.

With inflation running at just under 3 per cent, prompting last week’s decision to raise interest rates by the Bank of England, with more and more people feeling the pinch as a result, the rise is very necessary.

Brexit-induced price increases hit those on low incomes the hardest. Those working for living-wage employers will, however, be able to breathe a little easier.

While most people will welcome that, the programme does still have its critics. Although their voices are not as loud as they once were, there are those on the political right who still argue that paying people at the bottom of the wage scale properly will “destroy jobs” and point out that some businesses may struggle with the new rates.

Set against that is the evidence from those that pay the wage.

Members of the scheme get better work from their staff. Rates of absenteeism are lower. It’s easier for them to hire people, and they are more likely to stick around after they have signed up, which is particularly important at a time when the labour market is enduring shortages that Brexit, and the current disgraceful hostility towards EU citizens that work here, is exacerbating.

In other words, the Living Wage pays for itself, and should continue to do so after the latest rises.

That helps to explain why it’s not just big and wealthy companies – such as Barclays, Google and Ikea – that are part of the scheme. The number of accredited employers now stands at just under 3,700, and the Foundation reports that, of them, some 93 per cent report benefits.

This is a programme, then, that makes economic sense, before you even get to the social benefits, which are considerable in a country where large numbers of people are grappling with in work poverty to the extent that they have to resort to food banks, and in which the state, through schemes such as tax credits, continues to subside poverty pay.

“[The living wage] may not be possible or practical for everyone,” said Andy Bagnall, a director at accountancy firm KPMG UK, which is a living-wage employer itself. “But all organisations need to do what they can to address the problem of low pay.”

Indeed so. Those employers who would argue that it's not practical for them, however, should give due consideration to the latter part of Mr Bangall's statement. They might be pleasantly surprised at the results of doing so.