5 Million People Earn Less Than Living Wage

5 Million People Earn Less Than Living Wage.

Research released by the Resolution foundation has suggested that up to 4.8m people are earning below the so called ‘living wage’.

The minimum wage for a 21 year old + adult is £6.19 per hour and the living wage, the wage the supposedly gives people enough money to be able to live independently is suggested at £7.45 per hour.

The Labour party has long campaigned for a living wage and the Conservative/Liberal coalition is thought to be thinking about how they could introduce it and make it work. 

Comment

We all accept that people need enough money to live.  However, there are a number of issues to contend with:

It is frequently all too easy for people to stay on benefits and not work. 

As employers, financialadvice.net does pay healthily above both the minimum wage and the living wage but when employers have staff or job applicants that have little qualifications, have no self-desire to study, pass exams, develop skills or “put themselves out” then why would an employer pay more than the minimum?

In one recent job vacancy, we received a CV and application from a university graduate where there were 11 grammatical mistakes in the first three lines.  We are sure we are not alone in receiving such an appalling CV.  People are people, those that deserve higher pay will attain it, those that have little desire to better themselves, get qualified, retrain or simply get out of bed do not deserve to be paid more. 

That said, employees and employee pay are all relative to company profit.  If a large firm is making £billions, yet paying staff at minimum wage, they should be taxed at a higher rate.  All employees are valuable when they contribute to the success of a business and the burden should not then be on the State for employees of multi-billion pound organisations being forced to claim working tax credits and being burdens on the State when their employers are making huge profits.

Employers also have to contend with being much maligned, low pay, insurance, social security, paid holidays, compulsory pension contributions, sick pay, employment law, strikes, one sided employment tribunals and finally trying to actually  run a business.   If an employee does not like the pay rate, then they should improve their own skills set and leave.  The problem is some people simply have no desire to do that because they would not get better elsewhere.

Pay is a balancing act between motivating staff and motivating employers.  It should be allowed market freedom and the simple law of supply and demand rather than making living wage law.  There are simply too many unemployed today to force employers to increase wages when they can recruit another tomorrow at a cheaper rate.