Almost a quarter of workers in the North East aren’t paid enough to live on, a hard-hitting new study reveals.
The report by the Living Wage Commission says that the employment market is “polarising” with high paid and low paid jobs both increasing - while the number of middle income jobs shrinks.
But workers on lower salaries have suffered, seeing their wages fall in real terms since 2005, the report says, while the cost of necessities such as food and fuel have shot up much faster than the official rate of inflation, leaving many working people struggling to make ends meet.
The grim warning was presented by the Living Wage Commission, an independent body chaired by Dr John Sentamu, the Archbishop of York, and backed by the TUC, chambers of commerce and voluntary groups.
It is campaigning for every worker to be paid the “living wage”, a sum calculated to be the minimum needed to ensure a basic but acceptable standard of living. The 2014 rate is £7.65, or £8.80 in London.
In a new report called Working for Poverty, the Commission said there were 221,000 workers in the North East earning less than the living wage, or 23% of those in work.
This is the same proportion as in the North West and West Midlands, while the figure for Yorkshire and Humber is slightly higher at 24%.
But by contrast, just 18% of South East workers earn below the living wage, and the figure in London is 17% even though the living wage is higher.
Newcastle City Council was the first local authority in the country to introduce a living wage, ensuring no staff were paid below the sum, and others, such as Northumberland, have followed suit. Labour leader Ed Miliband backs the living wage while leading Conservative supporters of the policy include Hexham MP Guy Opperman.
But Dr Sentamu said more employers should adopt the policy, and he argued that paying higher wages would save the Treasury money because it would cut the benefits bill.
He said: “For the first time, the majority of people in poverty are actually in paid employment. The nature of poverty in Britain is changing. The idea of ‘making work pay’ increasingly sounds like an empty slogan to the millions of people who are hard-pressed and working hard, often in two or three jobs, and struggling to make a living.
“Meanwhile, the whole of the UK picks up the bill in tax credits, in-work benefits and decreased demand in the economy.”
Dr Sentamu added: “We know that not every employer could afford to implement a living wage right now. Yet we also know there are definitely employers that are able to pay a living wage but choose not to.”
The jobs where you are most likely to be paid below the living wage are barman or waiter. According to the report, 85% of people in these roles are underpaid.
Other jobs with a high proportion of workers below the living wage include catering assistant, vehicle cleaner, dry cleaning assistant, shop assistant, cleaner, hairdresser and florist.
Nationwide, 27% of female employees nationwide are paid below the living wage, compared to 16 per cent of men.
TUC general secretary Frances O’Grady said: “Low pay is blighting the prospects of millions of workers, and we need urgent action to tackle the low-pay problem.”