Millions will miss out on benefiting from the economic recovery unless they are paid a living wage, an independent commission has warned.
Rising living costs and stagnating wages are creating a ‘double squeeze’ on the lowest-paid workers, according to the group, chaired by the Archbishop of York, Dr John Sentamu.
More than 5million workers are paid less than the so-called living wage – set at £7.65 an hour nationally or £8.80 for London – a nine per cent increase since the previous year.
Dr Sentamu argued the idea of ‘making work pay’ was an ‘empty slogan’ for many families.
‘Meanwhile, the UK taxpayer picks up the bill in tax credits, in-work benefits and decreased demand in the economy,’ he said.
‘With the economy showing signs of recovery, employers that can pay a living wage must do so. ‘They should choose between continuing to make gains on the back of poverty wages or doing the right thing and paying a fair wage for a hard day’s work.’
Everyday items have risen sharply in price, with food costs up by 44 per cent since 2005, the report found.
Energy prices doubled over the same period, while housing costs tripled.
And there was a social cost, too, with children whose parents are on low pay less likely to achieve at school.
Those whose parents earned the living wage got nearly double the amount of family time during a typical working week, the authors added.
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 UK’s serious, and worsening, low-pay problem.’