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Living wage plea to large firms

Large firms in industries such as construction, banking and computing can afford to pay well above the national minimum wage and give their staff a so-called living wage, a new report argues.

Two think-tanks said more than six million people earned below the living wage, which is set at £8.30 an hour in London and £7.20 outside the capital, compared with the statutory rate of £6.08.

The Resolution Foundation and the IPPR said big companies in many sectors of the economy would only face a 1% increase or less in their pay bill if they switched to a living wage.

More than 600,000 people worked for less than the living wage in banking, finance, insurance and real estate, another 600,000 in manufacturing, 260,000 in transport and computing and 180,000 in construction, and firms should be challenged to explain why they could not increase basic pay, said the report.

Gavin Kelly, Resolution Foundation chief executive, said: "Living wage campaigns have already delivered improvements in pay for thousands of low-paid workers. Yet there are still relatively few employers that have made the commitment to pay a living wage.

"The wage bill costs estimated in this report challenge large companies in some key sectors to commit to a living wage or make clear why they are unable to help ensure their employees have a decent standard of living."

IPPR director Nick Pearce said: "There is no obvious business case for paying less than a living wage in finance, real estate, construction, computing and food production. Paying staff at least £7.20 an hour, or £8.30 in London, is both affordable and ethical."

A third of women and one in five men earned less than the living wage, said the report, with the highest percentages in areas including the North East, Yorkshire and the Humber, Wales and the West Midlands, the study showed.