Ending the misery of poverty pay would create a win-win scenario, stimulating the economy through increased spending, saving taxpayers’ money by cutting benefits and helping to close the gender pay gap.
The findings form part of UNISON’s evidence to the Low Pay Commission, which calls for the National Minimum Wage (NMW) to be substantially increased to reflect the ever rising cost of living. The UK’s largest union is also calling for the NMW to move towards a living wage for all workers (currently £8.55 an hour in London).
In its submission UNISON reveals that the current NMW is failing workers across the UK causing misery and stress to millions of families. The union cites a string of examples from members highlighting the impact of low pay:
Darren from Doncaster “I am constantly in debt, I have not been on a holiday for 5 years. My whole life is reduced to fixing and repairing items that should be binned and replaced. The strain on my family causes arguments.
Jane from Truro “My son works in the leisure industry which pays just above the minimum wage. With four young children, he struggles financially.
Denise from Carmarthen “I am a working single parent…. Following the death of my partner, with a disabled child and I am living on a shoestring, I live day-to-day, robbing Peter to pay Paul.
Brian from Perth “My pay has stayed the same for the past 2 years making ends meet is difficult with fuel bills rising all the time.”
Dave Prentis, General Secretary of UNISON, said:
“There is a real groundswell of support across the political divide and amongst the public in favour of the Living Wage.
“We know that ending poverty pay is just what the country needs to get it moving. It is a win-win scenario that would boost consumer spending helping struggling businesses and local high streets to survive. It would stop Scrooge employers using taxpayers’ money to top up poverty wages and would act as a catalyst for closing the gender pay gap.
“UNISON fought long hand hard for the introduction of the minimum wage and it has had a wholly positive impact on the lives of millions of working people. The time is right for the Low Pay Commission to take the next step and create a fairer society by moving towards a Living Wage.”
Around 1 million workers (4% of the workforce) are paid exactly the minimum wage, while a fifth of the UK workforce – 4.8 million – earn less than the Living Wage. However, the Office of National Statistics estimated that in 2012 about 287,000 workers were being paid less than the minimum wage but that figure rises when you add in workers on zero hours contracts. Recent research by the Resolution Foundation estimated that between 160,000 and 222,000 care workers are on such contracts and that is likely to be the tip of the iceberg.
The extent of the taxpayer’s subsidy of bargain basement employers was revealed in a report from the IPPR/Resolution Foundation, which estimated that the Treasury would benefit to the tune of £3.6bn if the Living Wage was introduced, this includes a £1.1bn savings on means tested benefits.
Raising the National Minimum wage stimulates the economy by boosting consumer confidence and spending. Studies show that for every extra £1 an hour paid to low paid workers the local economy benefits by an extra £0.63p of income creation.
Low Pay Commission reports have shown that raising the national minimum wage is a very effective way of closing the gender pay gap. Since its introduction in 1999 it has made a significant impact for women working full and part-time.
Ends
Notes to editors
Minimum Wage rates as at 1 October 2013
adult rate £6.31 an hour; 18-20 year olds £5.03 an hour;16-17 year olds £3.72 an hour; apprentice rate £2.68 an hour.
Please contact c.jeffries@unison.co.uk for full report