Final report of the Living Wage Commission: ‘Work That Pays’

Work that pays: The final report of the Living Wage Commission was published in June 2014.

It concludes that:

  • More than 1 million people can be lifted out of low pay by 2020, with research indicating this will have no adverse economic consequences
  • The cost of increasing the pay of nearly 500,000 public sector employees to the Living Wage could be more than met by higher tax revenues and reduced in-work benefits from over 600,000 private sector employees also brought up to the Living Wage
  • Professional service firms, like accountancy and consultancy companies, have nearly 300,000 low-wage staff who could be paid the Living Wage by 2020, and the banking and construction industries could pay the Living Wage to 75,000 employees with an increase to their wage bills of less than 0.5%
  • This extension of the Living Wage depends on the government adopting an explicit goal to increase the voluntary take-up of the Living Wage to at least 1 million more employees by 2020
  • The measures for the government to encourage such a transition include requiring all publicly listed companies to publish the number of people paid below a Living Wage.

The Living Wage Commission’s first report, Working for poverty, was released in February 2014. The report warns that the economic recovery could fail one in five people in paid employment.

The report, which provides a detailed analysis of the rise of low pay and working poverty, shows that spiralling living costs and stagnating wages at the bottom create a ‘double squeeze’ on the lowest paid. The five million people in low paid employment have the smallest budget elasticity, and are therefore hit hardest by rising living costs.