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The Living Wage: Facts and Figures

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The Living Wage: Facts and Figures realT he Scottish Parliament and Scottish Parliament Infor mation C entre l ogos. Financial Scrutiny Unit Briefing The Living Wage: facts and figures 23 November 2016 16/94 Andrew Aiton This briefing provides statistics on the number of people earning less than the Living Wage in Scotland and looks at the number of Living Wage accredited employers. Source: Living Wage Foundation CONTENTS EXECUTIVE SUMMARY .............................................................................................................................................. 3 THE LIVING WAGE ..................................................................................................................................................... 3 HOW MANY PEOPLE IN SCOTLAND EARN LESS THAN THE LIVING WAGE? ................................................... 4 HOW DO THE LATEST FIGURES AFFECT THE NATIONAL INDICATOR ON PAYING THE LIVING WAGE? ... 4 HOW DOES SCOTLAND COMPARE WITH THE REST OF THE UK? .................................................................. 5 ARE MEN OR WOMAN MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? ........................................... 5 WHICH AGE GROUP ARE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? ................................... 6 LIVING WAGE IN PUBLIC AND PRIVATE SECTORS ........................................................................................... 6 WHICH SECTORS ARE MORE LIKELY TO PAY LESS THAN THE LIVING WAGE? ........................................... 6 WHERE ARE PEOPLE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? .......................................... 7 HOW MANY ACCREDITED LIVING WAGE EMPLOYERS ARE THERE IN SCOTLAND? ...................................... 9 WHAT SIZE OF EMPLOYERS HAVE RECEIVED ACCREDITATION? ................................................................. 9 DOES THE PUBLIC OR PRIVATE SECTOR HAVE MORE ACCREDITED EMPLOYERS? ............................... 10 WHICH INDUSTRIES HAVE THE HIGHEST NUMBER OF ACCREDITED EMPLOYERS? ............................... 11 WHICH AREAS OF THE COUNTRY HAVE THE MOST ACCREDITED EMPLOYERS? .................................... 12 ANNEX ....................................................................................................................................................................... 13 DATA SOURCES ................................................................................................................................................... 13 Annual Survey of Hours and Earnings (ASHE) data ......................................................................................... 13 Scottish Living Wage Foundation ...................................................................................................................... 13 DATA ...................................................................................................................................................................... 13 SOURCES .................................................................................................................................................................. 15 RELATED BRIEFINGS .............................................................................................................................................. 16 2 EXECUTIVE SUMMARY This briefing provides statistics on the number of people earning less than the Living Wage in Scotland and looks at the number of Living Wage accredited employers. Key Points: There are 467,000 employees who earn less than less the Living Wage in Scotland. This has increased by 7,000 over the year. Scotland has the third lowest proportion of employees earning less than the Living Wage across the UK, at 20.1%. Women are more likely to earn less than the Living Wage. The “accommodation and food services” and “wholesale and retail trade” sectors have the highest proportion of people earning below the Living Wage. 90% of accredited Living Wage employers are small or medium sized which means they employ 250 or less people. 50% of Living Wage accredited employers in Scotland are registered in Scotland’s four biggest cities. THE LIVING WAGE The “real Living Wage” is an independently set hourly rate which is calculated according to the basic cost of living in the UK. These figures are calculated annually and announced in November. The calculation is done by the Resolution Foundation and overseen by the Living Wage Commission, based on the best available evidence on living standards in London and the UK. For more information on the calculation see SPICe Living Wage briefing (SPICe 2015). The real Living Wage is a voluntary rate which employers pay their staff £8.45 per hour. The National Living Wage was introduced by the UK Government from 1 April 2016. This requires employers to pay all staff aged 25 and over a minimum of £7.20 per hour. In order to avoid confusion this briefing looks at statistics for the “real Living Wage” not the National Living Wage. Although the Living Wage is not compulsory, on 9 November 2016, there were 644 employers in Scotland who have received accreditation as Living Wage employers. Accreditation requires employers to pay all staff including contracted staff at least the Living Wage. Accredited employer includes some large companies such as SSE, RBS, Standard Life and Aberdeen Asset Management. The Scottish Government has set out in its pay policy that all bodies covered by the policy must pay their staff at least the Living Wage, unless they are a Modern Apprentice (Scottish Government 2016e). This includes people directly employed by the Scottish Government as well as its agencies and NDPBs such as sportScotland, Scottish Court Service and Creative Scotland. The Scottish Government has outlined its commitment to promoting the Living Wage in its latest economic strategy (Scottish Government 2015a). Paying all employees aged over 18 the Living Wage is the core of the Scottish Business Pledge (Scottish Business Pledge). The Government’s preference is for employers to become “accredited Living Wage employers” which extends to all members of staff including contracted and third party staff. 3 HOW MANY PEOPLE IN SCOTLAND EARN LESS THAN THE LIVING WAGE? The latest statistics for people earning less than the Living Wage come from Scottish Government analysis of the Annual Survey of Hours and Earnings 2016 (Scottish Government 2016a). At the time of the survey the Living Wage was set at £8.25 per hour. It was increased to £8.45 in November 2016 and accredited employers have six months to bring in the uprating. It is estimated that there are 467,000 employees earning less than the Living Wage in Scotland, or just over 20% of the work force. This is an increase of 7,000 on 2015. Table 1: Employees (16+) earning less than the Living Wage in Scotland - 2016 Change on year Level Change on year Proportion (%pts) Scotland 467,000 +7,000 20.1% +0.5 Source: Scottish Government (2016a) HOW DO THE LATEST FIGURES AFFECT THE NATIONAL INDICATOR ON PAYING THE LIVING WAGE? Scotland Performs is the Scottish Government tool for measuring how the country is performing. It does this by measuring how the country performing against a number of Performance Target and National Indicators. One of the Indicators in Scotland Performs is: “Reduce the proportion of employees earning less than the Living Wage” The Government specifies that a decrease of 1.5 percentage points or more suggests that the position is improving an increase of 1.5 percentage points or more suggests the position is worsening. The increase of 0.5 percentage points over the year means that the indicator is maintaining its performance. Figure 1: The Living Wage National Performance Indicator 4 HOW DOES SCOTLAND COMPARE WITH THE REST OF THE UK? Despite seeing an increase of 7,000 people earning less than the Living Wage, Scotland has the third lowest proportion across the UK of employees earning less than the Living Wage. The figure for London is based on the London Living Wage rate of £9.75. Figure 2: Percentage of those in employment who earn less than the Living Wage across the UK Northern Ireland 29.5% East Midlands 27.7% Yorkshire & The Humber 26.4% West Midlands 25.8% North East 25.4% North West 25.3% Wales 24.9% South West 23.9% East 23.7% UK 23.2% England 23.2% Scotland 20.1% London 19.5% South East 18.6% Source: Scottish Government (2016a) ARE MEN OR WOMAN MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? In 2016 in Scotland, 24% of working women earned less than the Living Wage compared to 15% of men, with 64% of all people earning less than the Living Wage being women. However, the net increase in the number of people earning less than the Living Wage over the year was entirely accounted for by men. Table 2: Men and women earning less than the Living Wage, Scotland - 2016 Change from 2015 Level Change from 2015 Proportion (%pts) Men 169,000 7,000 15.4% +0.6 Women 297,000 0 24.3% +0.5 Source: Scottish Government (2016a) 5 WHICH AGE GROUP ARE MORE LIKELY TO EARN LESS THAN THE LIVING WAGE? The 18-24 year old age group has the highest proportion of people in employment who earn less than the Living Wage, at 53%. One reason for this is that this age group are more likely to be employed in accommodation and food services jobs, which have high levels of people earning less than the Living Wage. Table 3: Employees by age group earning less than the Living Wage in Scotland - 2016 Change on year Level Change on year Proportion (%pts) 18-24 129,000 -1,000 52.8% 0.0 25-34 100,000 3,000 20.2% 1.1 35-49 120,000
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