The proportion of workers earning less than £10.20 per hour in the region has increased from 19% last year. An estimated 820,000 jobs now fall below the threshold. London has the third lowest share of low earners out of the 12 UK regions, following the South East and Scotland.
The national figures show that there has been an increase of more than 1.2 million jobs falling below the threshold since 2012. Last year’s report saw the number of jobs paying below the Living Wage slightly down on the preceding year, hinting at some progress. However, the latest analysis conducted by IHS Markit for KPMG finds that the proportion of jobs paying less than the Living Wage now stands at 22 per cent (up from 21 per cent in 2017).
A closer look at the findings reveals that part-time workers are more than three times as likely to be paid below the Living Wage, with 43 per cent below the threshold compared to only 13 per cent of full-time workers.
The analysis also reveals that nearly seven in ten workers aged between 18 and 21 earned below the threshold, compared to the lowest proportion of only 15 per cent among those aged 40 – 49. The prevalence of in-work poverty increased again once approaching retirement age, with a quarter (25%) of those 60+ facing in-work poverty.
There continues to be regional disparity across the UK, with Northern Ireland and the East Midlands having the highest proportion of jobs paying below the Living Wage, at 26 per cent in each. By contrast, the South East has the lowest proportion, at only 18 per cent. The real Living Wage rate nationally currently stands at £8.75, whilst in London it is £10.20.
Looking to gender equality, the proportion of female employees earning less than the real Living Wage (27 per cent) continues to exceed that for males (17 per cent). This means that nearly 60 per cent more women were paid below the real Living Wage, compared to men. Furthermore, in every age category, the proportion of females earning less than the threshold exceeded the percentage of males, with the greatest gap noted among those 50 – 59 years of age.
Commenting on the findings, Kevin Smith, Senior Partner for KPMG in London, said:
“The latest real Living Wage analysis makes for very dire reading on all counts. While some progress was made last year, it’s clear that it has retreated and left more facing in-work poverty as a result, especially if you’re a part-time worker, under the age of 21 or over 60, female, living outside the South East, or any combination of these. In fact, the number of jobs paying below the real Living Wage has actually increased by 1.2 million since 2012, hammering home the magnitude of this problem.
“It’s critical that we reward and value those making a contribution to our society and economy, and clearly such a sizeable challenge requires a collective approach. For businesses though, it’s vital to look beyond the bottom line, and instead focus on non-monetary aspects that the real Living Wage can bring, like improved staff morale, rising service standards or increased productivity.”