What is the Real Living Wage?

  • The real Living Wage is independently calculated based on what employees and their families need to live. This is why it’s higher than the government minimum wage, rebranded as the ‘National Living Wage’.
  • Employers voluntarily choose to pay it – changing people’s lives right now
  • It applies to all workers over 18 – recognising that young people have the same living costs as everyone else


Why is it important to pay the Real Living Wage?

Low Pay in the VCFSE Sector

One in seven (14.1%) of Voluntary, Community, Faith and Social Enterprise (VCFSE) sector workers nationally are paid below the Living Wage, with over three quarters of the public backing them to receive enough to live on (Living Wage Foundation, June 2022).

These figures are reflected locally, with 14.5% VCFSE organisations across Birmingham City employing staff who were being paid less than a Living Wage (BVSC State of the Sector Survey 2021).

The effects of the Covid-19 pandemic combined with rising living costs has left many VCFSE workers struggling. Despite increased demand for services, low pay is harming workers within the sector and threatening stability of the services they provide. (Living Wage Foundation, June 2022).

An Unequal Wage

As well as receiving an unfair wage, many VCFSE workers receive an unequal wage:

  • Gender pay gap- 16.6% of women in the sector nationally paid below the Living Wage compared to 10.3% of men; 71.3% of all below Living Wage jobs in the VCFSE sector held by women.
  • Age pay gap- 58.4% of 16-19 year olds and 34.9% of 20-24 year olds in the sector nationally paid below the Living Wage
  • Ethnicity pay gap – Certain racialised minority groups face a heightened risk of low pay in the sector. ‘Other ethnic’, Pakistani and Bangladeshi, and Black African, Black Caribbean and Black British ethnic groups all have above average proportions of workers earning below the Living Wage
  • Disability pay gap – 16.5% of disabled workers in the sector earned less than the Living Wage compared to 13.1% of those who are not disabled.  (Living Wage Foundation, June 2022).

Community Impact of Low Pay

Those that the sector serve are also affected by low pay. 32% of those earning below the real Living Wage were forced to regularly skip meals, while 43% saw a negative impact on their levels of anxiety. (Living Wage Foundation, January 2022). Despite the pandemic and rising cost of living shining a spotlight on the importance of low paid workers, 1 in 6 workers (over 4.8 million) continue to earn less than the real Living Wage. (Living Wage Foundation, May 2022)


Impact of Real Living Wage

The national campaign for a Real Living Wage has delivered more than £1.8bn in extra wages to workers since it began in 2001, lifting 350,000 people out of in-work poverty. 1 in 13 UK workers now work for a Living Wage Employer with over 10,000 UK employers now accredited with the Living Wage Foundation. (Living Wage Foundation, May 2022)

The benefits to employers of paying the Living Wage are numerous:

  • 93% of Living Wage network say it has benefited their business;
  • 86% of Living Wage Employers say it has enhanced their reputation as an employer;
  • 75% say that it has increased motivation and retention rates for employees
  • 64% say it has helped differentiate themselves from others in their industry
  • 58% say it improved relations between managers and their staff

The benefits to society are wide ranging enabling people to:

  • Spend more quality time with their children
  • Save for an emergency or rainy day
  • Not have to worry about affording the basics


Join our movement to make Birmingham a Living Wage City

BVSC is a Living Wage Employer. Alongside our partners, including the Living Wage Foundation, Citizens UK, Birmingham City Council, Barrow Cadbury Trust and other Living Wage Employers and Funders, we’ve launched Birmingham as a Living Wage City. We want to see people across the City benefiting from the Living Wage, and invite you to get involved.


Resources

Real Living Wage in the VCFSE Sector

If you’re interested in details of the Real Living Wage in the VCFSE sector you may be interested in the following:

Living Wage Employers

  • If you’re an employer looking to pay a Real Living Wage, you may be interested in the following:

    Birmingham Living Wage Employer video which was produced for Living Wage Week November 2021:

Living Wage Funders

  • If you’re an organisation looking for funding to pay a Real Living Wage, or a funder looking to support the Real Living Wage, you may be interested in the following:

  Our Business Development & Funding Webinar (15/11/21) introduced Living Wage Funders:

Recording: https://vimeo.com/649455607 

Presentation: https://www.bvsc.org/Handlers/Download.ashx?IDMF=3a5a37a2-105b-45e1-a2c3-271a7dcdbcaf

Equality, Diversity & Inclusion

Not all people are currently receiving an equal and fair wage and we want to see that change.

Whilst gender pay gap reporting is mandatory for companies with over 250 employees, no such condition exists to monitor pay disparity for workers of different ethnicities.

In February 2022, the House of Commons Women and Equalities Committee published a report calling on the government to make ethnicity pay gap reporting mandatory by April 2023. However, in May 2022, the Government response to this indicated that reporting on ethnicity pay gaps would continue on a voluntary basis.

The Department for Business, Energy and Industrial Strategy are expected to publish guidance in “summer 2022” (see section 3.7) that will help employers who want to report their ethnicity gaps voluntarily.

There is also a disability pay gap and, as with the ethnicity pay gap, reporting only takes place on a voluntary basis.

There is little written about the age pay gap, however both younger people and older people in particular have received unequal pay. As well as a large percentage of younger people being paid below the Living Wage, the gender pay gap statistics have showed that older people are also being paid unequally. In 2021, the gender pay gap in the UK for people 40-49 years and older was around 12% compared to around 3% for those under 40 years of age (ONS, 2021).

Find out information about the pay gaps between people of different backgrounds:

Websites


Find out More