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The Living Wage benefits local economies as much as employees

For many years now, Citizens UK leaders have campaigned for more employers to pay the real Living Wage. There are countless benefits for the employees who are paid the real Living Wage instead of the government minimum; employees are paid a fair wage for the work they do, a wage which is vital for employees to keep their heads above water. Read more about the research behind this here.

New research revealed this week shows that it’s not just employees who stand to benefit from being paid a Living Wage.  Research findings published this week by the Living Wage Foundation and The Smith Institute establishes that wider adoption of the real Living Wage could create enormous economic benefits - up to £1.1bn in total - to the UK’s top 10 city regions. 

The report explains that if a quarter of low paid workers in the UK’s top ten city regions were uplifted to the real Living Wage (£10.20 in London, £8.75 in the rest of the UK) not only would employees receive an average annual pay rise of over £1,700, but the wider economy would benefit too:

  • UK city regions would benefit from a £560m boost; as well as a more inclusive local economy;
  • The Treasury would benefit from £350m in increased tax receipts and benefit savings;
  • And, if half of this £350m boost to the Treasury was returned by central government to city regions, the local economic benefit – a “Local Living Wage Dividend” - could increase to £1.1bn, when taking into account wider economic benefits such as increased local spending by low paid workers and government driving further economic activity.

When considering these findings, it’s hard to justify why employers don’t pay the real Living Wage. Our campaigners across the UK are urging anchor institutions - such as universities, hospitals, football clubs and city airports –  to take leadership on the Living Wage. Those institutions, together with the metro mayors and local authorities, have a responsibility to drive the Living Wage in their towns, cities and regions, and to integrate the Living Wage into their economic development strategies.

Everton FC is setting an example in Liverpool. This week the Liverpool Echo reported on the findings, claiming that “Liverpool’s economy could get a £55 million boost if more employers followed Everton FC’s model and adopted the “real Living Wage”.

This important research gives our community leaders across the UK the hard evidence to support their campaigns in towns and cities across the UK. At Citizens UK, we believe it is imperative that more local employers and institutions pay the real Living Wage: it’s now clearer than ever that this is the right thing to do, both morally and for the sake of stronger local economies.

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