The cost of living has risen exponentially in recent times, with wages failing to rise accordingly. Low wages and limited working hours are seeing many struggle to pay bills and suffering as a result. In 2001, a group of families came together to try and solve this issue by starting a campaign for a ‘Real Living Wage’. Now, twenty years on, the Campaign has become much more popular with employers and employees seeing a real change in their lives.
What is the Real Living Wage?
Campaigned for by the Real Living Wage Foundation, it is a voluntarily paid wage and determined by the real costs of living. 9000 UK businesses currently pay 300,000 people the Real Living Wage, with companies like Google, IKEA, and Brewdog all on board. Those outside of London are paid £9.90 per hour, whilst those within London are paid £11.05. The Foundation recommends employers implement the wage changes either immediately or within six months of a new announcement.
How does it differ to other types of wages?
The Real Living Wage differs significantly from the Minimum Wage and National Living Wage. Earnings, calculation methods, and geographical considerations, all differentiate the latter two from the former.
| The Real Living Wage | The National Living Wage | The Minimum Wage |
Wage sum | £9.90/£11.05 | £8.91 | £8.36 |
Age eligible | 18 | 23+ | 21-22 |
Legal status | Voluntary | Statutory | Statutory |
The calculations for these sums are all different. The Real Living Wage is influenced by the cost of living, household goods, and services, whilst the National Living Wage is calculated as a percentage of medium earnings. The Minimum Wage is negotiated based on recommendations by trade unions and businesses. The latter are both set by the government, whereas the Foundation will set the Real Living Wage figure. Incidentally, the Living Wage Campaign heavily influenced a higher minimum wage for those over 25 and labelled it the ‘National Living Wage’. This was, later, expanded to 23 and 24 year olds to benefit from.
The Real Living Wage also takes into account geography. It is well known that living costs in London are much higher than those outside. Therefore, the Foundation sought to make the Wage fairer by offering more to London employees, something the National Living Wage and Minimum Wage do not do.
Benefits for business?
Findings done by the Foundation have found that the Real Living Wage has had a very positive affect on the businesses adopting the Wage. According to the findings:
86% of business said it increased their reputation.
75% said employee motivation and retention increased.
64% said it helped differ them from other companies in their field.
58% said it improved staff-manager relations.
All this has led to the idea becoming very popular within society and believing this to be the best type of wage available. 90% of consumers say that pay should reflect real living costs and 87% think companies should voluntarily pay this to their staff.
In addition to the Wage, the Foundation has set out their ‘New Standard’ with regards to working hours. Many struggle to get enough hours to receive a decent wage, and so the Foundation has called for assurances to be made to employees. It’s called for:
Decent notice periods of at least 4 weeks and a guaranteed payment if a shift is cancelled within this period.
The right to a contract which reflects accurate worked hours.
A minimum of 16 hours per week, unless requested otherwise by the employee.
It is hoped that the New Standard, as well as the Real Living Wage will become widely adopted in the near future, helping individuals live more comfortably and eradicating wage poverty.
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