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5 November 2012 | PR 12/193

Loughborough academics set new Living Wage rate

Purse

Researchers at Loughborough University are behind the increase to the Living Wage, which is being announced today.

The Living Wage is being increased by 25 pence to £7.45p per hour following research conducted by Loughborough’s Centre for Research in Social Policy (CRSP).

It coincides with Living Wage Week which runs all this week. It will be launched by the Joseph Rowntree Foundation today in York and by London’s Mayor Boris Johnson in London, and there will be events up and down the country celebrating the fact that the Living Wage is catching on.

Unlike the Minimum Wage (£6.19p), which is enforced by law, the Living Wage is voluntary but it has the backing of Boris Johnson and has been adopted by the Scottish government and most large English cities, not least Birmingham. Nearly 100 companies are now accredited payers of the Living Wage.

There have also been high profile campaigns at universities and it is a hot topic in the church, with the Church of England General Synod due to discuss it later this month.

CRSP say people need to earn £7.45 an hour to be able to pay for food, heating and clothes, as well as to participate in a minimum level of social activity.

They arrived at the figure after research with many focus groups, each consisting of about eight people, who reached a consensus about what they needed for an acceptable living standard.

Donald Hirsch, director of CRSP, whose work on the minimum income standard is funded by the Joseph Rowntree Foundation, said: “The important thing is that there is a general sense that the minimum wage is not enough and people cannot get an acceptable living standard on it.

“The work we have done in our centre provides solid evidence for that.

“Our research is based not on what experts think people need but on what members of the public tell us in great detail what a family needs to make ends meet.

“And that doesn’t mean just survival but what you need to participate in society.

“We have worked with the Living Wage Foundation to produce a figure for what people need to earn outside London.

“This was £7.20p but we have had a look at living costs and how they have increased and come up with a new figure of £7.45p, which is just over three per cent more.

“The problem is that even though wages are not going up generally, costs are going up, often faster than inflation.

“Things like food prices have gone up quite a lot in recent years, child care has gone up, social rents have gone up a lot.

“And at the same time some of the tax credits have been cut back which means you need to earn more than before to get to the same net income.

“The important thing about the Living Wage is that it gives you a benchmark which is showing how living costs are changing and what you need to do to keep up with those changes, rather than wages just being based on negotiations between employer and employee.

“What is interesting is how the idea has caught on. A lot of organisations, particularly in the public sector, are able to introduce a Living Wage at very little cost because there are just a few people at the bottom end of their pay scales who are earning less than this.

“It’s an attractive idea to think you can do the decent thing and set a floor based on what people need rather than what they have been paid in the past.”

Mr Hirsch said a three per cent increase was realistic in the current climate.

“You have to be realistic because employers in the present environment are not going to increase wages by 20, 30 per cent.

“I am happy that this this is something that takes account of rising costs but doesn’t create an impossible ask for employers.”

He said he was delighted that CRSP was able to make a difference to thousands of families. “As an academic I can say that it’s very rare in social science research that you can see such direct consequences of your research.

“It’s certainly very pleasing that you are making a difference.”

Rhys Moor, director of the Living Wage Foundation, said: “Paying a Living Wage makes a huge difference to the quality of life of thousands of cleaners, caterers and security staff across the country.

“It is really encouraging to see nearly 100 organisations now signed up and accredited.  But that still leaves many more organisations that aren’t.  We hope that Living Wage Week will create real momentum and that many more employers will sign up.

“Studies have shown that when paying a Living Wage the savings through lower staff churn, lower absence rates and better performance significantly offset any cost.  We simply believe that it is the right thing for employers to do.”

−ENDS−

For all media enquiries contact:

Chris Goddard
Public Relations Officer
Loughborough University
T: 01509 223491
E: C.J.Goddard@lboro.ac.uk 

Notes for editors:

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.

It was awarded the coveted Sunday Times University of the Year 2008-09 title, and is consistently ranked in the top twenty of UK universities in national newspaper league tables. In the 2011 National Student Survey, Loughborough was voted one of the top universities in the UK, and has topped the Times Higher Education league for the Best Student Experience in England every year since the poll's inception in 2006. In recognition of its contribution to the sector, the University has been awarded six Queen's Anniversary Prizes.

Loughborough is also the UK’s premier university for sport. It has perhaps the best integrated sports development environment in the world and is home to some of the country’s leading coaches, sports scientists and support staff. It also has the country’s largest concentration of world-class training facilities across a wide range of sports.

It is a member of the 1994 Group of 13 leading research-intensive universities. The Group was established in 1994 to promote excellence in university research and teaching. Each member undertakes diverse and high-quality research, while ensuring excellent levels of teaching and student experience.

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