Key workers earning less than Real Living Wage as Universal Credit cut looms

Supermarket staff and carers are among those who are set to be clobbered by the benefit cut

Hundreds of thousands of key workers are paid less than the Real Living Wage – with the cost of living crisis set to mount when Universal Credit is slashed, a report warns today.

An RSA study says the looming benefit cut of £20 a week coupled with the impending National Insurance hike are piling pressure on low-paid staff.

Some 410,000 supermarket employees – 45% of the total – and 393,000 carers – 31% of the workforce – are paid less than the benchmark for decent living standards.

The Real Living Wage’s hourly rates are £9.50 outside London and £10.85 in the capital. Analysts calculate the voluntary level by taking into account costs like housing, travel and healthy food, and extras like kids’ birthday presents.

It is paid regardless of employees’ ages. In contrast, the Government’s “national living wage” – the rebranded minimum wage – is £8.91 an hour and only paid to workers aged 23 and over.

Hourly minimum pay for under-18s is £4.62; the rate for workers aged 18 to 20 is £6.56; and the minimum for those aged 21 and 22 is £8.36.

Some 660,000 key workers are set to lose their £20 per week Universal Credit rise later next month(OCT), according to RSA calculations.

But lifting carers’ pay to the Real Living Wage would pump an extra £990 a year into their wallets before tax – and cost the sector £455million, the RSA says. The average supermarket worker would be £410 better off.

In a move which would cost the industry £262m annually.

The RSA’s future of work programme chief Alan Lockey said: “We need to focus on good work for everyone if we’re to level-up.

“Boosting the incomes of the lowest-paid key workers would be good for those employees, good for UK productivity, and good for the workforce as a whole as this would likely raise wages across the board.

“We also need to see a ‘new deal’ for our key worker heroes, including better childcare, decent sick pay and better mental health support, especially in the NHS.”

Living Wage Foundation director Graham Griffith said: “Supermarket staff and care workers have been vital in keeping the country fed and cared for throughout the pandemic.

“This important report shows that all too often this commitment is very poorly rewarded, with almost one million supermarket and care workers earning below the Real Living Wage.

“It’s time these essential workers are paid a Real Living Wage, so that they can put food on the table and care for their own families, as well as ours.”