Jo McMahon, a textile worker from Stockport, shares her relief and gratitude for the recent pay rise she will receive as part of the Real Living Wage scheme. This voluntary scheme, initiated in the UK, has positively impacted hundreds of thousands of low-paid workers like McMahon, providing them with a 10% pay increase from their employers who voluntarily have signed up to the scheme. The rise, according to the Living Wage Foundation, affords a much-needed “lifeline” to many workers across the country.
While the government stipulates a minimum wage, employers participating in the Real Living Wage scheme are making a pledge to offer a pay rate that surpasses this, established on what the Living Wage Foundation perceives as necessary to meet individuals’ everyday costs. Subsequent to the increase, the pay rate under the scheme is now £1.58 more than the government-established minimum wage of £10.42 an hour for those over the age of 23.
McMahon, who works for a school uniform manufacturer, One & All, will see her pay rate climb from £10.90 to £12 per hour. She voices just how significant this is for her, allowing her the financial leeway to enjoy a fulfilling life and save for a rainy day. McMahon shares her contrasting experiences with friends who aren’t quite as fortunate and can’t afford the same luxuries as she can.
Likewise, workers in London who are part of the scheme will find their pay increasing from £11.95 to £13.15 per hour. For a full-time worker earning the new Real Living Wage, this could equate to an annual income increase of £3,081 compared to someone earning the national government minimum and even an additional £5,323 for London-based workers.
The scheme has been willingly adopted by approximately 14,000 employers, benefiting more than 460,000 workers, the Living Wage Foundation reveals. Brett Mendell, director of textiles manufacturer Thomas Kneale in Manchester, speaks in favour of the scheme. He acknowledges the seemingly costly commitment but, from experience, Mendell asserts that benefits such as greater productivity and loyalty from colleagues do amount to significant savings over time. He emphasizes that there has been a remarkable 60% reduction in staff turnover and a 75% decline in absence since his company joined the scheme.
Nevertheless, concerns about the sustainability of the scheme have been rasied. Charles Cotton from the CIPD, the organizations that specializes in HR and people development, stated that some organizations are hesitant to sign up due to a “cost-of-business” crisis. He suggests that these returns take time to materialize; a short-term solution would be investing in technological advances, enhancing products and services, and improving skills and management, subsequently utilizing these profits to elevate wages. Jane Gratton from the British Chambers of Commerce echoed similar sentiments, pointing out the current tough business conditions and the inability of some firms to accommodate above-inflation pay rises.
However, despite falling inflation rates, the Living Wage Foundation confirms that the number of employers joining the scheme continues to soar. They bring to attention the fact that the recent increase in the Real Living Wage rate is in response to the persistently high day-to-day living costs, which continue to be a struggle for low-paid workers who spend a large share of their income on essential commodities like food and energy.
The Foundation reveals disheartening data showing that fifty percent of low-paid workers in the UK are worse off than they were a year ago, with many resorting to food banks and struggling to pay basic household bills. Despite the current improvements, an estimated 3.5 million people still find themselves grappling with the unrelenting burden of the cost-of-living crisis.
