Issue date

Low pay is costing the UK Treasury more than £3.2 billion as means tested benefits and tax credits continue to subsidise employers failing to pay workers a decent wage.

TUC research has today (Friday) revealed the true scale of potential savings to the UK Government if workers were paid the living wage.

If every worker in Wales was paid at least the living wage, the UK Government would see a saving of £154 million through reduced spending on benefits and a boosted tax take. As part of living wage week, Wales TUC is today emphasising the need for a rebalanced economy that places wage growth and quality jobs at the heart of the recovery.

As lasting austerity brings about a cost of living crisis, trade unions are highlighting their call on sectors such as retail and hospitality to reverse the trend towards low pay that has done so much to weaken the Welsh economy and family incomes. Wales TUC is also urging employers who can afford to pay the living wage to take action now to tackle the shocking rise in in-work poverty across Wales. A recent Joseph Rowntree Foundation report found that better pay and more hours at work are the best way to tackle the scourge of in-work poverty which affects around 285,000 workers in Wales.

Wales TUC President, David Evans said:

“Low pay costs every single one of us. Some large companies are getting away with underpaying their staff as means tested benefits and tax credits top up incomes, that still leave thousands of working families below the poverty line. Good employers continue to be undercut by bad ones and now more than ever, workers across Wales need a pay rise.

“The living wage is not a silver bullet and in many cases workers deserve to be paid a great deal more if employers are to truly recognise the value of their workforce. This kind of employment is also characterised by abuses of rights at work and the intolerable rise of zero hours contracts. This issue is at the heart of turning the Welsh economy around.

“We need to encourage jobs that invest in people including access to training and development. Workplaces with a recognised trade union will often deliver better wages, opportunities to learn and develop as well as proper protection from harassment and bullying.

“A boost in pay should be part of an improved employment package that provides working people with the respect and security they deserve.”