Increasing 'real' living wage would offer £1.1bn economic boost says Foundation

Some 5.5 million people in the UK are still paid too little to live on, according to the Living Wage Foundation

PAYING the voluntary "real" living wage would give workers an annual pay rise of over £1,700 and give cities an economic boost of more than £1 billion, according to a new study.

Research for the Living Wage Foundation found that tax receipts would also rise and there would be benefit savings if more workers were paid £10.20 an hour in London and £8.75 in the rest of the UK - higher rates than the statutory national living wage of £7.83 for adults.

The study showed that if a quarter of workers on low incomes living in 10 city regions saw their pay rise to the real living wage, productivity and spending would increase, leading to a £1.1 billion boost to the economy.

The foundation, which sets the voluntary rate, urged hospitals, football clubs and other organisations to work with local authorities and metro mayors to increase payment of the higher wage.

Tess Lanning, director of the Living Wage Foundation, said: "By championing the real living wage based on what people need to get by, leading mayors and local authorities can build successful, dynamic local economies and most importantly ensure that the proceeds from growth are fairly shared.

"With over 5.5 million people still paid too little to live on, the real living wage is a key plank of any strategy seeking to tackle the UK's problems of in-work poverty, regional inequality, and weak productivity."

Paul Hunter, deputy director of the Smith Institute, which conducted the research, added: "Big employers often like to talk about the positive role they play in their local community.

"One way that they can go beyond the warm words is to pay their staff the living wage and demand their suppliers do the same."

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