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Real Living Wage Rises in the UK amidst Covid-19 perils

Over 250,000 people are set for a pay boost.

@dos_aves via Twenty20

Unleash Your Wages Are employers and their payroll solutions prepared for the change?

  • 86% of accredited businesses say it has improved the reputation of the business.
  • 75% say it has increased motivation and retention rates for employees.
  • 64% say it has helped differentiate themselves from others in their industry.

Over 250,000 people who work for an employer who has voluntarily signed up to the “real living wage” are set for a pay boost of 20p to £9.50 an hour, says the BBC as of 9th November 2020.

The Real Living Wage is based on the cost of living, in a bid for people’s salaries to meet their everyday needs such as the weekly shop or a surprise trip to the dentist. The Living Wage Foundation is at the heart of this campaign.

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Internationally, the term varies slightly in what it means exactly, but the premise that the Living Wage is enough to meet basic needs such as a standard level of nutrition, housing, transportation, energy, healthcare, childcare, education, and enough to have some savings, are largely held throughout.

The reason for having the Real Living Wage is due to the fact that the national minimum wage in the UK is not calculated according to what employees and their families actually need to live on. The national minimum wage “is based on a target to reach 66% of median earnings by 2024.”

Since the start of lockdown, the BBC reports 800 more employers have accredited with the Living Wage Foundation.

What are the business benefits of paying the real living wage (according to

  • 86% of accredited businesses say it has improved the reputation of the business
  • 75% say it has increased motivation and retention rates for employees
  • 64% say it has helped differentiate themselves from others in their industry
  • 58% say it improved relations between managers and their staff

And from both an ethical and international standpoint, the Ethical Trading Initiative offers these additional benefits of providing a Living Wage:

  • Reduction in government spending as workers rely less on benefit payments to survive
  • Eradicate ‘the working poor’ phenomenon – i.e. people who are unable to make ends meet because wages are too low
  • Decrease the gap between the national minimum wage and cost of living
  • Awareness about poor working conditions
  • International standardization and ethics for businesses
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Paying living wages is easier if companies and trade unions work together Beverly Hall, our Industrial Relations Advisor, highlights the importance of companies and unions coming together to negotiate living wages – and the international consensus that productive employment and decent work are key elements in achieving poverty reduction. Living wages are a matter of human rights. Not only is paying a living wage part of the ETI Base Code of labour standards, it is also part of the responsibilities on business set out in the UN Guiding Principles on Business and Human Rights. But if you actually want to know what a living wage is for your factory, your company or your industry, then there’s no better way than asking your workforce AND their union. Read our blog to find out more: #bizhumanrights #ethicaltrade #supplychains #ethicaltradinginitiative #industrialrelations #tradeunions #UNGPs #livingwage

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It is even more pertinent that this increase has come to fruition for employees and employers alike, given the backdrop, this has been announced against where there are many organizations announcing pay freezes, pay cuts, and mass redundancies.

When many employers are facing the most challenging period in their organizational histories, it is arguable that in the face of such uncertainty, providing the workforce with financial security and certainty will provide much-needed confidence and an injection of moral to the whole economic value-chain.

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