The Living Wage Foundation have announced their real Living Wage recommendations for 2019-20. Calculated independently from the government’s National Living Wage, the  real Living Wage takes into account a broader set of factors and fundamentally draws a distinction between London and the rest of the UK. The new increases will see wages rise for 210,000 people employed by Living Wage Employers.

With the updates, the real Living Wage has been set to £9.30 for the UK, over one pound greater than the government’s National Living Wage which sits at an obscure £8.21. The real Living Wage for London is higher, now at £10.75 with yesterday’s announcement. When calculated as a year of earnings, this equates to an additional £2000 for individuals across the UK and £5000 for those living and working in London. Compliant Living Wage Employers will need to update their payroll before 1st May 2020 to remain an accredited employer.

Increases are calculated by the Living Wage Commission who account for how living costs are experienced across different demographics and family units, as well as the background of inflation and the cost of goods.  A “core basket” of good normally purchased in a supermarket is added to rent, travel costs, council tax and childcare. Tax bands are also taken into account, with the non-taxable amount of £12,500 being the new lower limit. When compared with rates from the previous year, London’s gross increase is 20p (1.9%) and the UK’s is 30p (3.3%).

Courtsey of Living Wage Foundation

Courtsey of Living Wage Foundation

Over the past year, the roster of companies accredited by the Living Wage Foundation has increased by 1500, taking the total just shy of 6000 as the decade closes. Some stories emerge within this cohort, indicating the regional relevance of the campaign. Salford and Cardiff are on the road to becoming Living Wage Cities, and in London, International House Brixton became the first Living Wage Building. Cardiff alone has set an aim to double the number of workers receiving the real Living Wage to nearly 50,000. The range of companies is broad in scope, with Hiscox, Crystal Palace Football Club, Welsh Water, London City Airport and Newcastle University representing a range of services and company sizes.

At the launch event itself, accounts from Liam McKay of London City Airport indicated the lengths at the Living Wage Foundation will go to in ensuring a company meets criteria - his experience as Facilities Director took seven months and required sign off from international shareholders. As an employee being paid the real Living Wage, Commis Pastry Chef of COOK Melissa indicated in another account how the income and helped her buy a home, the first place she would ever be able to call home having been fostered at a young age.

Despite efforts by groups like Living Wage Foundation, one in five people in the UK earn less than the real living wage. Additionally, Living Wage Week also raises conversations about job quality, and further analysis on just what jobs low-incomes do. In timing with the new levels, The Resolution Foundation published analysis on the state of jobs in 2019, looking at how employment is experienced differently across time, with gender, contract type and sector prospects featuring as key distinguishers. Manufacturing is now less than 10% of employment, compared with and the service sector (21%). Jobs in retail, hotels and restaurants really matter for the UK economy, a topic touches on by Laura Gardiner’s informative BBC piece.

For more information, visit Find calculation analysis via The Resoution Foundation and and the FT.