MORE than a million people could be lifted out of low pay by 2020 with no adverse economic consequences, says a commission chaired by the Archbishop of York.
The final report of the independent Living Wage Commission follows the most comprehensive analysis to date of low pay, conducted over 12 months by leading figures from business, trades unions, academia and civil society.
It recommends a series of pragmatic measures to take people out of low pay, including a requirement for all publicly listed companies to publish the number of people paid below a Living Wage.
It concludes 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.
Currently 5.2 million people are said to earn less than the Living Wage and the majority of people in poverty are now in working households.
The legal minimum wage is currently £6.31 an hour for adults and £5.03 for 18 to 21-year-olds, but the living wage is £8.55 an hour in London and £7.45 an hour in the rest of the UK.
The report warns that, if the Government does not support the voluntary extension of coverage of the Living Wage, some working families will continue to rely on emergency measures, such as food banks and unsustainable debt, to get by.
However, the commission does not recommended the introduction of a compulsory Living Wage, warning that the increased wage bill would not be affordable for some firms in some sectors, such as retail and hospitality, and for many small firms.
The Archbishop, Dr John Sentamu, said that working and still living in poverty was a national scandal.
“The campaign for a Living Wage has been a beacon of hope for the millions of workers on low wages struggling to make ends meet,” he said. “If the government now commits to making this hope a reality, we can take a major step towards ending the strain on all of our consciences. Low wages equals living in poverty.”
Dr Adam Marshall, of the British Chambers of Commerce, said the return to economic growth meant many employers were now looking again at increasing levels of pay for their employees after a tough period for business.
He said they should be supported and encouraged to make this happen without facing compulsion or regulation, which could lead to job losses.
Frances O’Grady, General Secretary of the TUC, said there was now the perfect opportunity to transform the lives of millions of people in low-paid households.