Future Generations Commissioner Derek Walker calls on public bodies, businesses and the Welsh Government to guarantee fair pay, warning that low-paid workers are increasingly exposed to the combined shocks of the cost-of-living crisis and climate change.
Wales must do more to protect low-paid workers from the economic shocks of a changing climate, with the Future Generations Commissioner calling for every public body to pay the Real Living Wage and for businesses receiving public money to follow suit.
Derek Walker argues that fair pay is no longer simply a question of employment standards. As energy costs rise and households face mounting pressure on essential spending, he says, ensuring workers earn enough to live on is becoming an essential part of preparing Wales for an uncertain future.
His intervention comes as the Real Living Wage reaches £14.10 an hour, a rate independently calculated to reflect the actual cost of living, rather than the statutory minimum set by the UK government.
The distinction matters. While the legal minimum establishes the lowest rate employers can pay, the Real Living Wage is designed to cover everyday essentials, including housing, food, transport and heating.
For workers already struggling to balance household budgets, the difference can determine whether an unexpected energy bill becomes manageable or another source of financial distress.
People cleaning our schools and hospitals, keeping our public spaces safe and feeding society should not be using food banks to get by each month or struggling to heat their own homes,” Walker said.
“Paying people the Real Living Wage is critical to ending in-work poverty, child poverty, and supporting people in the cost of living crisis, the impacts of which are compounded by climate change.”
The commissioner wants all public bodies in Wales to adopt the wage, alongside a stronger commitment from private employers. He is also pressing the Welsh Government to make Real Living Wage accreditation compulsory for businesses receiving public sector contracts and grants.
The campaign has made measurable progress. In its 25th anniversary year, the Living Wage movement says it has helped lift 20,400 workers in Wales on to the Real Living Wage, generating an additional £141mn in income for low-paid employees.
The number of public bodies accredited as Real Living Wage employers has also increased, from 12 to 19 among the 55 organisations covered by the Well-being of Future Generations Act. Powys council and North Wales Fire and Rescue are among those signing up this year.
But the figures expose a substantial gap between ambition and implementation. Only two of Wales’s seven health boards and six of its 22 local authorities currently pay the Real Living Wage.
For Walker, that shortfall raises questions about the credibility of public institutions committed to improving well-being while some of their own workers remain on wages that fall short of the cost of living.
“The increase in uptake for Wales is promising and now all public bodies must pay the Real Living Wage to support its workers in a changing world and the shocks to come in the future,” he said.
The argument extends beyond direct public sector employment. Low-paid workers employed by contractors and suppliers can remain outside the benefits of an organisation’s own accreditation, creating a weak link in attempts to establish fair pay across the economy.
Emily Cotterill, head of fair economy at Cynnal Cymru, the Welsh accreditation partner for the Real Living Wage, said employers needed to look beyond their immediate payrolls.
A Real Living Wage Wales needs a Real Living Wage supply chain and every employer can play their part,” she said.
Cynnal Cymru has supported more than 600 businesses through accreditation. Cotterill said more than 90 per cent of accredited employers reported benefits, including improved staff retention, lower sickness absence and a stronger ability to win contracts.
“We know that more than 90% of accredited employers report seeing a benefit from accrediting, whether that’s improved staff retention, reduced sickness absence, or a better ability to win contracts,” she said.
That provides a commercial argument for fair pay at a time when employers are balancing recruitment difficulties and pressure on operating costs. Accreditation, she added, also offers a visible demonstration of an organisation’s commitment to its workforce.
Citizens Cymru is similarly urging employers and public authorities to accelerate progress. Fiona Meldrum, its lead organiser, described low wages as one of the biggest pressures facing vulnerable communities in Wales.
Low wages is one of the biggest issues putting pressure on the most vulnerable communities in Wales,” she said.
The organisation’s alliance of faith, education and community groups wants more employers to adopt the rate, while encouraging local authorities to make accreditation a priority ahead of next year’s council elections.
The business case is illustrated by Sparkles Cleaning Services Wales and West, a Barry-based company employing 35 people. The business won the 2022 Living Wage Employees Choice Award, with managing director Ceri Jennings attributing strong staff retention partly to its commitment to fair pay.
“Doing what matters for our people is at the heart of everything we do, and our Real Living Wage accreditation demonstrates our commitment to supporting and valuing our team,” Jennings said.
“In return, we benefit from a loyal and dedicated workforce, reflected in our high staff retention rates.”
For Walker, however, the challenge is ultimately one of economic resilience. As climate-related disruption adds to pressure on household energy bills and living costs, workers on the lowest incomes have the least capacity to absorb another shock.
The Real Living Wage campaign, now a quarter of a century old, has demonstrated that employers can make progress voluntarily. The commissioner’s demand is that Wales moves beyond pockets of good practice and makes fair pay a defining expectation of public spending and employment.
The question is whether government and business will turn that ambition into a requirement before the next economic shock arrives.
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