KPMG, one of the world’s largest professional services firms has released data indicating that in the UK one in 5 people are not being paid enough to live the most basic lifestyles. This fraction equates to around 4.82 million people.
The national minimum wage is currently set at only £6.19 an hour for adults over the age of 18. KPMG claim that the current rate for a basic standard of living is £8.30 in London and £7.20 in the rest of the country.
It is no secret that Britain and most of the world has been hit by a double dip recession which has caused widespread spending cuts and general austerity, equally, there has been no surreptitious to the nature of new spread about the fact that those who are poor are hit the hardest during times of economic woe.
41% of the UK’s population are saying that their finances now are worse than they were only a month ago, which in itself is a foreboding statistic. A lot of employers have signed up to the Living Wage scheme which is a voluntary rate of pay that has seen the redistribution of around £96 million since its initialisation in 2001 and has helped tens of thousands of low paid workers and their families.
Places throughout the UK hit hardest are Northern Ireland which has 24% of their population living on under the Living Wage amount, Wales is a close second at 23% but London and the South East are the least hit with only 16% in each.
Will Becker, chief executive at Totally Money, a finance advice hub, gave his comments on the subject:
“Of course most employers act in a competitive labour market and perhaps feel minimising labour costs is vital to their own survival. However, they’d do well to note that there’s a decent body of evidence that paying above market salary rates is more than compensated by increased productivity from a more loyal and motivated workforce.
“Meanwhile at a national, macroeconomic level it has long been suggested by economists that laws of supply and demand require that if wages rise, employers will naturally use less labour and jobs will be lost. But there’s a growing body of evidence here too that as minimum wages have been imposed or raised, the expected drop in employment has failed to materialise. So in sum, there’s much to ponder for individual businesses and governments about the type of company they want to build and the type of society we want to live in.
"We're concerned too that many of those earning less than the living wage are starting to lean more heavily again on expensive forms of debt to ease short term cash-flow problems with the recent figures showing growth in overdraft borrowing compared to the better value offered by credit cards".