Almost six million employee jobs in the UK are estimated to be paid less than the Living Wage.
Figures from the Annual Survey of Hours and Earnings (ASHE) show that in 2014 an estimated 5.9 million jobs were paid below the Living Wage.
The south east of England, London and Scotland had the lowest proportion of jobs paid below the Living Wage – all at 19%. Northern Ireland had the highest, at 29%.
The Living Wage, as recommended by the Living Wage Foundation and the Mayor of London, is a voluntary pay standard which covers the basic cost of living.
Find out how many jobs are paid below the living wage in your area:
Proportion of employee jobs paid less than the living wage, Local Authorities of GB, 2014
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What could have influenced the increase in jobs below the Living Wage?
The figures show there has been a rise in the proportion of jobs paid less than the Living Wage, which in April 2014 rose to 19% in London and 23% in the rest of the UK.
The rise could be the result of general wage stagnation after the economic downturn of 2008-2009, accompanied by a recovery in demand for low-skill, low-pay workers by 2013-2014.
Proportion of employee jobs paid less than the living wage by age, UK, 2014
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Proportion of employee jobs paid less than the living wage by sex, UK, 2014
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In 2014, a higher percentage of female jobs were paid less than the Living Wage, compared with male jobs: 16% of male jobs in London and 18% in the rest of the UK, whereas 22% of female jobs in London and 29% in the rest of the UK.
This equates to 3.6 million female employee jobs below the Living Wage in the UK in 2014, compared with 2.3 million male employee jobs.
Some 48% of jobs in the 18-24 age group in London and 58% of jobs in this age group elsewhere in the UK were paid less than the living wage.
Proportion of employee jobs paid less than the living wage by selected industries, UK, 2014
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The industry which saw the highest proportion of jobs paying less than the Living Wage was accommodation and food services, at an estimated 65% in London and 70% in the rest of the UK.
There was also a high proportion of below-living-wage jobs in retail, with 55% of retail jobs in London and 59% outside the capital city.
Employee jobs were also particularly likely to be below the living wage in the cleaning and care sectors, which have been identified as vulnerable to low wages by the Low Pay Commission.
What is the Living Wage and how much is it?
The Living Wage is a voluntary pay standard for employees aged 18 and over who are not apprentices, interns or trainees.
It is currently set at £9.15 an hour in London and £7.85 in the rest of the UK. At the time of the latest survey estimates (April 2014), it was £8.80 in London and £7.65 in the rest of the UK.
It is due to increase by 40 pence, to £9.55 in London and £8.25 in the rest of the UK, as announced by London Mayor, Boris Johnson, on November 2, 2015.
The Out of London Living Wage is calculated by the Centre for Research in Social Policy at Loughborough University, while the London Living Wage is calculated by the Greater London Authority.
This compared with the median hourly wage of £15.82 for London and £11.08 for the rest of the UK , as calculated by the Annual Survey of Hours and Earnings, 2014 provisional results. (Link to Appendix 1 of main Living Wage article.)
What is the National Living Wage and how much is it?
Plans to introduce a compulsory minimum wage premium for all staff over 24 years of age were introduced in the July 2015 budget.
From April 2016, employers are required to pay the National Living Wage of £7.20 an hour for workers aged 25 and older. The government has instructed the Low Pay Commission that the minimum wage premium for over 24s should reach 60% of median earnings by 2020.
The compulsory rate (the National Living Wage) is based on median earnings while the voluntary living wage rates are calculated according to the cost of living.
What is the National Minimum Wage and how much is it?
The National Minimum Wage is the minimum pay per hour almost all employees are entitled to by law. This depends on a worker’s age and whether or not they are an apprentice.
It is currently (2015 rate) £6.70 for those 21 and over; £5.30 for 18 to 20 year olds; £3.87 for under 18s and £3.30 for apprentices aged 16 to 18 and those aged 19 or over who are in their first year of training.
The National Minimum Wage is set by the business secretary each year on the advice of the Low Pay Commission and enforced by HM Revenue and Customs (HMRC).
From April 2016, the National Minimum Wage will still apply for workers aged 24 and under while the National Living Wage will apply for those aged 25 and over.
At present it is not possible to present estimates of jobs below the National Living Wage because data for April 2016 will not be available until later that year. At the time of this study, the Living Wage was set at £8.80 for London and £7.65 for the rest of the UK.
For more information, please contact: earnings@ons.gov.uk