A leading think tank has warned that a quarter of workers in the north of England — or around 1.6 million people — are paid less than the real living wage.
Across the board, weekly pay in real terms has also fallen £21 – or 3.8% — since 2008, and one in three women are paid less than the real living wage there, the Institute for Public Policy Research (IPPR) said on Wednesday.
To remedy the crisis, the IPPR is calling for the region’s local authorities to make the payment of the £9-an-hour real living wage to employees a condition of outsourced contracts.
The real living wage, championed by the Living Wage Foundation, is a voluntary rate of pay calculated according to what employees and their families need to live.
A new report published by the IPPR blames the dramatic increase in the number of zero-hours contracts and the fact that wages in the UK overall are still 2% lower than they were in 2008.
The report also points to “significant major cuts to in-work benefits” and the introduction of universal credit, which replaced six other out-of-work or low-income benefits with a single monthly payment.
While the IPPR said that “the responsibility for this crisis lies principally with central government,” it suggested that there was significant scope for local government “to support and encourage better employment.”
“There are numerous examples of local authorities using their power and influence to improve work locally. Across the country, councils have become living wage employers or have implemented other policies that encourage decent work,” the IPPR said in its report.
While it noted that austerity has disproportionately affected local authorities in the north of England, it said they could help combat the pay crisis by paying their staff well, introducing criteria to give preference to contractors who pay the real living wage, and by using their influence in the local economy.