As the annual increase to the Minimum Wage takes effect today, Mike Kelly, head of Living Wage at KPMG, suggests that the rise will not be enough for many of Britain’s lowest paid and encourages companies to consider whether they can offer their staff a Living Wage.
Mike says: “Increasing the National Minimum Wage to £6.50 per hour is recognition that the UK’s many employees are caught in a working poverty trap. The proportion of people on low pay climbed as a result of the 2008 crash and, with the cost of living continuing to rise, the chances are that more people on low wages will find themselves unable to pay the bills, despite holding down a regular job."
“The fact remains that more than 5.2 million people are earning less than they need to live on. Too many families still struggle to afford the basics, meaning we face a scenario that, in 2014, should have long been consigned to the footnotes of history."
“More than 900 organisations have recognised that employing staff stuck in the working poverty trap is bad for business. It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. The focus should not be on what the minimum wage is that companies can get away with, but on how they can afford to pay staff enough to live on. We have seen the benefits of paying a Living Wage in terms of lower staff turnover and increased productivity. Put simply, it means moderate investment for maximum return.”
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.