Many people associate poverty with unemployment or developing countries. In reality, the problem of poverty is much closer to home than many realise – and actually affects many working people struggling to make ends meet. This might seem strange as we live in one of the most developed countries in the world with legislation in place to protect employees, such as the National Minimum Wage.
Each year the government sets the National Minimum wage, affecting millions of the countries lowest paid workers. The original idea behind its implementation was to compel companies to ensure they paid a fair wage to their employees for their work. So, if this is the case, surely it should be difficult for any working person in the UK to be living in poverty?
Given the rising costs of living and the stagnation of wages since the 2008 economic crisis, the fact is that poverty in the UK is likely to rise if nothing is done about it now.
The Living Wage – What is it?
The Living Wage is designed to solve this problem. It is announced each year by the Living Wage Foundation, who actively promote the benefits and positive impacts of employers paying a fairer Living Wage (ensuring employees earn enough to live a minimum standard of living), rather than the National Minimum Wage (which is not high enough to keep people out of poverty).
Calculated each year by the Centre for Research in Social Policy (CRSP) of Loughborough University, the Living Wage is an hourly rate based on figures of minimum income required for a household to maintain minimum acceptable standards of living. It is currently set at £8.25 for the UK as a whole, and £9.40 for those living in London. The Minimum Wage is currently £6.70 per hour.
The Living Wage is important for many reasons. Without enough money coming in, problems facing a household can be more than just financial. The emotional strain caused by financial worries can be huge, affecting entire families, including children. This affects not just individuals, but the very future of our society. The burden of supporting people in this position is also usually passed on to the state, through increased benefit bills and, in the most extreme cases, increases in the need of expensive social services needed to tackle social problems and crime.
Why Should you Support the Living Wage?
The government has pledged to introduce a “national living wage” for all people over 25 years of age. This will see the minimum wage rise to £7.20 in April 2016, reaching £9 per hour by 2020.
Although this is welcome news, the fact is millions of workers in the UK are still affected by low wages today. 70% of people working in retail for example earn less than the Living Wage right now, that’s 760,000 people, the largest single affected group. Amongst workers who wait tables, work behind bars or in kitchens, the proportion of workers earning less is even higher.
The Living Wage foundation supports and promotes employers which pay at least the living wage voluntarily. They maintain a searchable list on their website, and detail the many benefits that paying a fair wage can bring employers.
For those looking to invest money ethically this can be a key consideration. Businesses which promote more ethical practices have been shown to grow at a faster rate, providing not only better returns for investors, but also ensuring that other businesses and governments are put under pressure to adopt more ethical practices and legislation.
If ethical business practices are important to you, then so should supporting the Living Wage. It provides workers with enough money to live happy fulfilled lives, benefiting society, and encouraging growth in all spheres of life.