National Living Wage: Small change but big difference for the JAM families
Guy Stallard, director at KPMG in the UK, comments on the increase in the National Living Wage announced by the Chancellor in today’s Autumn Statement.
Today’s announcement will see a significant number of workers aged 25 and above get a pay rise of 30p an hour to £7.50 from next April. This may seem like small change to some, but for many people it’ll make a huge difference.
With the cost of living higher than it’s ever been, the reality for many is that they are forced to live hand to mouth. The increase in the National Living Wage will go a long way to save swathes of people being caught between the desire to contribute to society and the inability to afford to do so.
However, it is important that we tackle the issue of low wages for the younger generation too. Low pay blights the prospects of the young and more than two thirds (72 percent) of 18-21 year olds earn less than the voluntary Living Wage (paid at £8.25 nationally and £9.40 within London). This lack of financial freedom means those finishing school and university cannot fly the nest and gain the independence other generations have enjoyed, despite being in employment.
As an employer that has been paying the voluntary Living Wage for ten years, our experience is that it delivers real and tangible business benefits like improved staff morale, rise in service standards, improvement in the retention of staff and increase in productivity.
It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.