Call for ‘living wage cities’ to tackle low pay

A series of 'living wage city deals' could help the fight against low pay, according to a joint think-tank report. Under such deals, some of the dividend to the Exchequer from cities paying a living wage in the public sector would be recycled back to the local area, to support small and medium-sized businesses in moving away from low pay.

Key points

  • £2.2 billion could be saved each year by the Treasury if everyone received a living wage (currently set at £7.45 an hour – £8.55 in London), as a result of higher tax revenue and lower benefit payments.
  • Almost four million workers in the private sector are paid less than the living wage – amounting to 84 per cent of all workers earning less than the living wage across the UK.
  • The 'city deals' recently signed by the government with eight English city-regions should be boosted to include provisions relating to the living wage.
  • Cities or regions would have to draw up a plan showing how the money from government would be used to encourage more small and medium-sized enterprises to become living wage employers.
  • Living wage cities could apply to renew their deal if they could show a target number of companies had begun paying a living wage.

Source: Matthew Pennycook and Kayte Lawton, Beyond the Bottom Line: The Challenges and Opportunities of a Living Wage, Resolution Foundation/Institute for Public Policy Research
LinksReport | Resolution press release | IPPR press release | CARE press release | TUC press release | Guardian report

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