Wednesday, 6 November 2013
5 Numbers you need to know about Labour's Living Wage plan
Ed Miliband has announced plans to introduce Make Work Pay contracts which will help businesses raise wages for millions of low-paid workers - and help the next Labour government cut social security bills for the taxpayer. Here are five numbers you need to know about the plan: 1) 4,800,000 - number of people who work for less than the living wage. Millions of people aren't paid a living wage. Across Britain, millions of people work hard, put in a shift, and aren't paid enough to get by. In 2012 there were 4.8 million workers in the UK who were paid less than the prevailing living wage rate in their area, two-thirds of those people were women. For 39 of 40 months under David Cameron prices have risen faster than wages. Despite working hard, people are struggling to get by. 2) £3,230,000,000 - the cost of low pay to taxpayers. The government spends more on benefits for people in work than it does for unemployed people. Workers paid less than a living wage receive much needed social security support, and pay less in taxes because of their low pay - that's an annual bill of more than £3 billion. 3) 49p - the average saving to the taxpayer for every pound of pay rises for workers. If Labour wins the election in 2015, we'll launch a national campaign for firms to sign up as living wage employers. Make Work Pay contracts will mean that every company that moves to paying the living wage in the first year of a Labour government will help us cut the social security bill. For every extra pound employers pay to raise workers from the minimum wage to a living wage, the Treasury will save 49p on average in the form of lower social security payments and higher tax revenues. 4) £21,000 - the average tax rebate to employers who start paying the living wage from 2015. Firms which sign up to paying the living wage at the start of the parliament will benefit from a 12-month tax rebate of up to £1,000 –and an average of £445 – for every low paid worker who sees their pay rise to the living wage. On average, it is predicted firms who sign up will get a tax rebate of £21,000 each - and employees more motivated and productive, and less likely to leave to look for better opportunities. 5) £1,376 - the average payrise for workers struggling with the cost of living crisis. This plan is good for businesses who do the right thing, and it will help the next Labour government cut the social security bill. But it's also great news for workers. Under these new Make Work Pay contracts it is estimated that people will, on average, see a pay rise of £1,376.