The rate is based on JRF’s Minimum Income Standard research, which considers what income is needed to provide an adequate standard of living. The Living Wage is paid voluntarily, with organisations accredited by the Living Wage Foundation (LFF). The Living Wage enjoys cross-party support and public backing from the Prime Minister and Leader of the Opposition.
The announcement was made by Nestlé, the York-based employer and the first major manufacturer to receive accreditation as a Living Wage employer in the UK. This accreditation covers approximately 8,000 employees across Nestlé UK and its sister companies. The company is now working with contractors to ensure that their employees working across Nestlé sites will also be paid the UK Living Wage by December 2017.
The new rate is announced after data showing the extent of low pay in the UK: LWF figures show 5.2 million people are paid less than the Living Wage. In the Yorkshire & Humber region, 25% of workers are on less than the Living Wage - approximately 481,000 people. At the event in York, JRF, Nestle and City of York Council (CYC) urged businesses who could afford the Living Wage to pay it to their staff.
Julia Unwin, Chief Executive at JRF and JRHT, said: “With the economy recovering from a deep and damaging recession, our research shows higher pay is vital to helping low-earning workers make ends meet. The Living Wage - which recognises the cost of essentials in how it is calculated from JRF research - is an important part of the answer. We will never achieve our full economic potential until we address the high levels of poverty across the UK, so paying a Living Wage is an important first step to getting to grips with the country’s in-work poverty problem.
“As an employer providing housing and care services who pays the Living Wage, we would urge all employers who can afford it to consider paying the rate - a decision which is good for individuals, businesses and society.”
Matt Stripe, Group HR Director, Nestlé UK & Ireland, said: “As a major UK employer with a significant site in York, we know that acting responsibly and making a positive socio-economic impact is not only good for the communities we operate in, but also makes good business sense.
“Supporting the Living Wage Foundation as a Principal Partner underlines our belief that people are at the heart of our business. We are proud to be the first mainstream manufacturer in the UK to become a Living Wage employer and see this as an opportunity to be a positive influence in our sector.”
Rhys Moore, Director of LWF, said: “As the recovery continues it’s vital that the proceeds of growth are properly shared. It’s not enough to simply hope for the best. It will take concerted action by employers, government and civil society to raise the wages of the 5 million workers who earn less than the Living Wage.
“The good news is that the number of accredited Living Wage employers has more than doubled this year – over 1,000 employers across the UK have signed up. In the last 12 months the number of Living Wage employers in the FSTE 100 has risen from four to 18. Those businesses that can should follow the example of Nestlé and Nationwide, as well as hundreds of smaller, independent businesses like The Golden Ball Co-operative Pub, York and Awesome Merchandise, Leeds, who pay the Living Wage.
“Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process. The Living Wage is an independent calculation that reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”
Kersten England, Chief Executive of CYC, said: “Although York is a relatively wealthy place with near to full employment, many in the city are in low paid work. We continue to work with the city’s businesses and skills providers with the aim of ensuring that everyone can benefit from growth. I am pleased to see that major employers in the city such as Aviva and Nestle are fully engaged on this agenda and have made strong commitments to their staff, including the Living Wage.”