Partner Article

One in four North East workers trapped by in-work poverty, study shows

According to a new report published by KPMG, almost a quarter of people (23 per cent) in the North East are still earning below the real Living Wage, meaning that an estimated 222,000 employees are struggling to get out of in-work poverty.

The research, conducted by IHS Markit for KPMG, found that the total number earning below the real Living Wage in the UK is down slightly by 100,000 compared to last year, when an estimated 22 percent of all jobs and 5.6 million roles paid less than the real Living Wage.

This is the first reduction in five years, but still leaves the total one million more people earning below the real Living Wage than in 2012.

In terms of concentration of low-earning roles, Northern Ireland has the highest proportion of jobs earning below the real Living Wage at 26 percent, followed by the East Midlands, Yorkshire and Humber, Wales and the West Midlands all at around 24 percent.

The lowest proportion of employees earning less than the Living Wage is found in the South East at 17 percent, Scotland at 18 percent and London at 19 percent.

In the North East, around 132,000 part-time employees (46 per cent) earn less than the real Living Wage, compared with 96,000 full-time workers (14 per cent). Part-time jobs are almost three times more likely to pay below to pay below £8.45 per hour than full-time roles in the region.

For five years in a row, the national research finds that women are considerably more likely to be paid below the real Living Wage than men. In the North East, the proportion of women earning less than the real Living Wage in 2017 was 28 per cent, compared to just 16 per cent for men.

However, by number of people rather than proportion, London at around 750,000, followed by the South East and North West at an estimated 635,000 each are the areas with the highest levels.

Commenting on the number of people earning below the real Living Wage, David Elliott, office senior partner at KPMG in Newcastle, said: “Today’s figures show that more work needs to be done if we are to eradicate in-work poverty.

“It’s unfortunate that in 2017 more than 222,000 working people in the North East are earning below the real Living Wage and cannot enjoy the standard of life so many of us take for granted.

“It is clear that it may not be possible or practical for everyone, but businesses need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.”

Katherine Chapman, Living Wage Foundation Director said: “Today’s figures show that, whilst moving in the right direction, there are still 5.5 million people earning less than the real Living Wage across the UK and with the cost of living increasing as inflation rises, those on lowest incomes are really feeling the squeeze.

“The new Living Wage rates will be announced tomorrow and with tough times ahead it’s more important than ever that great employers are stepping up to ensure that their staff earn a wage that ensures workers can live with dignity.”

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