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Jobs paying less than real Living Wage drops to seven-year low

Jobs paying less than real Living Wage drops

Less than one-fifth (19%) of UK jobs pay below the real Living Wage.

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James Stewart

Vice Chair, Head of Brexit and Industrial Strategy

KPMG in the UK

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  • Less than one-fifth (19%) of UK jobs pay below the real Living Wage
  • The latest estimate is down from 22% last year and the lowest since 2012
  • Part-time workers are three times more likely to be paid below the threshold of £9.00 (or £10.55 in London)
  • All UK regions experience a drop in the share of jobs paying below the real Living Wage
  • Around 24% of women face in-work poverty compared to 15% of men
  • Female in-work poverty is highest in the East Midlands and lowest in Scotland

After a setback last year, KPMG analysis released today has revealed that significant progress has been made on the real Living Wage in 2019. Just under one-in-five (19 per cent) of UK jobs currently pay below the threshold of £9.00 and £10.55 in London, which is down from 22 percent in 2018. This is the lowest figure for seven years and represents a decrease of around 560,000 jobs paying less than the real Living Wage.

The number of jobs paid less than the real Living Wage now stands at an estimated 5.19 million, down from a peak of 5.75 million in 2018, according to the latest analysis conducted by IHS Markit for KPMG.

A closer look at the findings reveals that there is still a long way to go for part-time workers. Around 38 percent of part-time jobs earn less than the real Living Wage, compared to only 12 percent for full-time employees. London is a particular hotspot for part-time jobs that are paid less than the real Living Wage (46 per cent).

On gender equality, the proportion of female employees earning less than the real Living Wage (24 per cent) exceeds that for males (15 per cent). This equates to around 3.2 million female employees compared to 2 million males. By region, the proportion of females earning less than the threshold is highest in the East Midlands (29 per cent) and lowest in Scotland (20 per cent).

Female part-time staff make up the largest broad category of jobs paid less than the real Living Wage, which is an estimated 2.1 million employees and therefore accounts for around 40% of all in-work poverty.

Commenting on the findings, James Stewart, Vice Chair of KPMG UK, said:

“The Brexit impasse has undoubtedly impacted the jobs market and it is clear that employers have stepped up and taken decisive action to retain and motivate their workforces.

“Over the coming period of uncertainty productivity will be key and we know that the real Living Wage is an effective driver. What’s good for our workers is good for business too and there is a real opportunity for many to look at the remuneration of their staff in terms of overall benefit to their business as well as the bottom-line.

He added:

“But we must ensure that part time workers are not left behind – as these figures show well over a third are not benefiting from the real Living Wage. There are also far too many women who are not benefiting from these changes and over the coming year we must address this and the regional disparities which still exist.”

Katherine Chapman, Director of the Living Wage Foundation, added:

“We know the campaign for a real Living Wage has had a huge impact in tackling in-work poverty. Over the last year we’ve seen more and more responsible organisations recognise that a real Living Wage is not only good for workers and their families, but it also makes good business sense. However, with over 5 million workers still paid below the Living Wage – and 24% of women compared to 15% of men - it’s clear we need to see more employers step up and commit to pay a real Living Wage.”

-ENDS-

 Year   Number earning below voluntary Living Wage (millions)* Percentage of jobs below voluntary Living Wage*

Real UK Living

Wage (£)

Real London Living

Wage (£)

2012

4.54

19%

7.20

8.30

2013

4.87

20%

7.45

8.55

2014

5.33

21%

7.65

8.80

2015

5.60

22%

7.85

9.15

2016

5.62

22%

8.25

9.40

2017

5.55

21%

8.45

9.75

2018

5.75

22%

8.75

10.20

2019

5.19

19%

9.00

10.55

 

About the research:

KPMG commissioned IHS Markit to conduct the eighth annual update of its data analysis on the Living Wage. The IHS Markit methodology is based on analysis derived from the Annual Survey of Hours and Earnings (ASHE) conducted by the Office of National Statistics (ONS). The survey provides a detailed breakdown of hourly earnings, allowing for granular analysis, including full and part-time as well as key demographics such as region and gender. Results are published on both a national and UK regional basis.

Historical overview of UK voluntary Living Wage estimates (all employee jobs)

* IHS Markit estimates, rounded. Estimates for number of jobs derived from ASHE 2019.

 

Regional overview of proportion of jobs earning less than the UK voluntary Living Wage in 2019:

Region  Proportion of those earning below the voluntary Living Wage (%)

Northern Ireland

23

East Midlands

22

North East

22

Yorkshire & Humber

22

Wales 

21

West Midlands

21

North West

20

South West

20

London

19

East

19

Scotland

17

South East

15

 

 

UK

19

* IHS Markit estimates, rounded. 

Gender overview of jobs earning less than the real Living Wage in 2019:

Gender  Proportion earning below the voluntary Living Wage (%) Number earning below the voluntary Living Wage (millions)

Female

24

3.2

Male

15

2.0

 

* IHS Markit estimates, rounded. Estimates for number of jobs derived from ASHE 2019.

About IHS Markit

IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2019 IHS Markit Ltd. All rights reserved.

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