Progress on the Living Wage in Birmingham

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The campaign for a Living Wage for workers across the country has been ongoing now for many years. The living wage is increasingly seen as one of the solutions for in-work poverty.  It is based on the amount an individual needs to earn to cover the basic costs of living – estimated to be significantly above current levels for the minimum wage.  Over the past few years the idea has  gained a great deal of traction from across the political spectrum, having been promoted nationally by the Living Wage Foundation.  The current living wage is estimated to be £7.85 an hour for people outside of London, and £9.15 for those living in London.  (For more information on the calculation click here).

The idea of Living Wage has returned to the headlines recently with the Chancellor’s announcement in the recent budget that he would be introducing a National Living Wage of £7.20 and hour for those over 25 from next April.  This will rise to £9.00 by 2020.  While announcement has received mixed reviews from employers, and has gained some cautious welcomes by charitable organisations, although there is some concern that the figures are just higher minimum wages rather than actually at the level of a living wage.

In Birmingham, the City Council has been paying the nationally recognised living wage for sometime now, having first adopted Living Wage for Council employees back in 2012, with the City Council receiving a nomination for the Living Wage Champion Awards 2014.

But what does the living wage look like across the rest of the city?

Earlier this year and before the Chancellor’s announcement,  the Centre for Research in Social Policy  – the body who calculate the living wage outside of London – published a report looking into the Living Wage in Birmingham.  This report –Making ends meet in Birmingham: assessing the impact of the living wage and welfare reform –  has some interesting findings, including:

  • Household incomes reached a peak in 2009 and earnings have not returned to this level yet.
  • Birmingham actually has a smaller proportion of workers below the living wage than nationally
  • Since the adoption of the living wage by Birmingham City Council, the proportion of public sector workers below this level has fallen dramatically to only 2% of workers, compared to 8% nationally.
  • There is a stark contrast between public and private sector workers within the city: 27 %of private sector workers were paid less than the living wage in 2013 compared to 2 % in the public sector.
  • The city has witnessed significant increases in the proportion of workers who are self-employed since 2009: 13% of all those aged 16-64 working in Birmingham in early 2014 were self-employed.

The full report contains more interesting findings – which the Child Poverty Commission will use to in their work.  But what is clear is that the introduction of the living wage has clearly done much to reduce low pay in the public sector, but low pay within the private sector remains a challenge for Birmingham.

Full report here

 

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