The Real Living Wage: a win-win for business and workers

Cambridge City Council is celebrating its ninth year as an accredited Real Living Wage Employer, meaning council staff have been earning at least the Real Living Wage (RLW) since 2014.

The Living Wage Foundation updated the RLW hourly rate of pay in October this year, to £12 per hour for workers across the UK outside London.

The rate is independently calculated and is updated each year based on the actual living costs of people in the UK – looking at everything from housing costs and groceries, to transport costs and school uniforms.

This is different to the government’s National Living Wage (NLW), which is currently £10.42 per hour. Instead of being based on actual living costs, it’s based on an average of workers’ current incomes.

Another difference between the RLW and the government’s NLW is that accredited Living Wage Employers will pay all workers the RLW as a minimum, regardless of age or experience. Whereas the government’s NLW is the minimum guaranteed pay only for workers who are 23 or older.

People who are 22 or under aren’t guaranteed the NLW. They are only eligible for the National Minimum Wage (NMW), which can be as low as £6.83 for 18 to 20-year-olds, or £9.18 for 21 to 22-year-olds.

Housing costs remain a key concern for people in Cambridge, as Cambridge is one of the most expensive cities in the country to rent privately. What’s more, inflation in Cambridge has risen by almost 9 per cent in the last two years. These rising costs are impacting residents, and an increase in people’s pay will go a long way to help.

But the benefits of paying the Real Living Wage are not only felt by workers.

In the latest UK-wide survey of accredited Real Living Wage employers, 94 per cent of respondents reported benefits to their organisation. There were 22 types of benefits reported, ranging from improvements in recruitment and retention, and enhanced corporate reputation, to greater success in attracting customers, securing investment, and winning contracts.

Cllr Alice Gilderdale, executive councillor for community wealth building and community safety, at Cambridge City Council said: “For organisations wanting to demonstrate their commitment as a responsible employer, Real Living Wage accreditation is the best place to start. There are a number of Cambridge employers already accredited, but the likelihood is that many employers may already be paying the Real Living Wage, even before accrediting.

“These non-accredited employers may not have considered how much people in supply chains are earning, such as those providing catering, cleaning or security services. Therefore, another benefit of accreditation as a Living Wage Employer is assurance that workers that support your business indirectly are also earning enough to afford essential living costs.

“Accreditation would also mean your business can display the Real Living Wage Employer Mark – ensuring your business also benefits from the recognition of support for workers.”

Cambridge City Council is committed to encouraging local businesses to pay a Real Living Wage and can support businesses who are interested in pursuing accreditation.

Find out more at cambridge.gov.uk/living-wage.