Labour market Over a third of women in their 20s set to earn less than the living wage 2 November 2015 Over a third of women in their 20s are set to earn less than the living wage next year, according to a new analysis published today (Monday) by the Resolution Foundation to mark Living Wage week. The analysis finds that the number of employees earning less than the living wage is set to rise to a record 6.5 million in 2016 – up from 5 million in 2012, and almost 6 million this year. Women in their 20s are 50 per cent more likely to earn less than the living wage next year (36%) than the workforce as a whole (24%), and over three times more likely than men in their 40s (10%). Almost three in ten men in their 20s (29%) are set to earn less than the living wage next year. The proportion of workers set to earn less than the living wage is highest in the East Midlands, Wales and Yorkshire & Humber (28%) – and lowest in the capital (20%), despite having a higher London living wage. Previous Resolution Foundation research found that the proportion of younger workers (16-30 year olds) in low pay has risen steadily over the last 30 years, while the proportion of older workers (61+ year olds) in low pay has fallen for much of the last 20 years. The Foundation says that the high proportion of younger workers earnings less than the living wage highlights the need for action to boost pay, including more high quality apprenticeships, greater opportunities to progress out of low pay, and a big push for more employers to become living wage accredited. Many of those earning below the living wage will see their pay increase next April as a result of the new National Living Wage (NLW) – the new higher wage floor for workers aged 25 and over. The Foundation welcomes the ambitious new wage floor announced by the Chancellor, which marks an exciting new stage for the minimum wage. However, it says the NLW has a separate role to the living wage – it is legally enforceable and based on labour market conditions rather than the cost of living – and should not be regarded as one. It notes that while a worker working full-time on the minimum wage will get a £1,000 pay rise next April as a result of the new higher wage floor, they would earn a further £2,000 should their employer pay them the voluntary living wage. The Foundation adds that for low-income families, higher wages offer a significant – but incomplete – route way towards raised living standards, with strong employment growth and targeted in-work support also playing a key role. Adam Corlett, Economic Analyst at the Resolution Foundation, said: “The number of people earning less the living wage has increased rapidly in recent years, with over a third of young women set to earn less than the new rate next year. “While you’d expect young people to move onto higher wages as they gain experience, the fact that they are moving jobs far less frequently today compared to before the crash is a real cause for concern. This risks holding up their careers and could leave them stranded on low pay for longer. “More needs to be done to boost wages and pay progression for young people. Greater take-up of the voluntary living wage should play a key part in that, along with a renewed focus on better career ladders within businesses and industries. If we fail to help young people today we risk scarring their incomes for the rest of their careers.” Proportion of employees paid below the living wage by age and gender Notes to Editors The RF estimates of the number of people earning below the living wage take account of actual and projected employment growth since 2014, but do not take account of changes in the distribution of pay. The RF analysis excludes those below the age of 21. The living wage is currently is £7.85 an hour and £9.15 in London, though the new rates will be announced later today. Further information about Living Wage Week is available at livingwage.org.uk The Resolution Foundation’s latest annual Low Pay Britain report is available at resolutionfoundation.org/publications/low-pay-britain-2015/ This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.
