How many people earn less than the living wage?

Published: 26th Sep 2017

Roughly 6.2 million jobs were paid less than the living wage promoted by the Living Wage Foundation campaign group in 2016. This isn’t the “National Living Wage” set in law by the government, it’s a higher wage that the Foundation says should be paid for individuals to achieve an adequate standard of living.

In the same year around 362,000 jobs earned less than the National Living Wage or National Minimum Wage set by the government. The National Living Wage is the legal minimum that people aged 25 or over can be paid. The National Minimum Wage is the legal minimum for those under the age of 25.

Some people may have more than one job so we can’t know exactly how many people are working in these jobs. The figures also don’t count people who are self-employed, under the age of 18, or anyone who wasn’t paid during the time period when the figures were collected.

Roughly six million jobs earn below the voluntary living wage

There are two sources that look at how many jobs are earning less than the voluntary living wage promoted by the Living Wage Foundation.

The first comes from the Office for National Statistics (ONS). Its analysis found that around 6.2 million jobs across the UK earned less than the voluntary living wage in April 2016. That’s 23% of all employee jobs, not counting those who are self-employed. The ONS says this figure is likely to slightly underestimate the actual number of jobs earning below the living wage and the figures should be treated with some caution.

Separate research by IHS Markit for KPMG is often cited as the source of figures on those earning less than the living wage. It estimated that there were 5.6 million jobs earning less than the voluntary living wage in April 2016. That’s about 22% of jobs—up from 19% in 2012 when IHS Markit analysed the figures that year.

We’ve asked IHS Markit and the ONS  for more information about the differences in their figures.

At least 5.4 million people earned less than the living wage, according to ONS figures for 2014. It found that around 5.4 million people had one job and earned less than the voluntary living wage that year. A further half a million jobs were held by people with more than one job, so we don’t know exactly how many people were doing these.

We’ve asked the ONS for more up to date figures.

Around 360,000 earn below the National Living or Minimum Wage

Around 362,000 jobs earned less than the National Minimum Wage or National Living Wage in April 2016, according to the ONS. That’s about 1.3% of employee jobs in the UK.

The ONS says that this doesn’t mean all these workers are on an illegally low wage. It says “it is not always possible to determine from the survey data whether an individual is eligible for the minimum wage. For example, if employees receive free accommodation, employers are entitled to offset hourly rates.”

There’s more than one living wage

The Living Wage Foundation’s voluntary living wage is calculated each year by the Resolution Foundation. It’s based on what members of the public say is necessary to achieve an adequate standard of living.

At the moment the recommended living wage across the UK is £8.45 per hour outside London, for all workers aged 18 and over.

The living wage for London is £9.75 per hour which it says reflects the higher cost of housing, childcare and transport needs of workers living in the city.

The National Living Wage is set at £7.50 (since April 2017) and is the minimum that can be paid to workers aged 25 and over. For workers under 25 the National Minimum Wage applies; this varies depending on exactly how old they are.

The calculations done by the ONS and IHS Markit looked at in this article were based on older rates of the voluntary living wage and the National Living Wage and National Minimum Wage.


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