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Paying a real Living Wage could boost Glasgow City Region’s economy by millions

Posted: 03/09/2018

Paying a real Living Wage could boost Glasgow City Region’s economy by millions

Paying A Real Living Wage Could Boost Glasgow City Region’s Economy by Millions

  • A new report finds that if just a quarter of Glasgow’s lowest paid workers were paid the real Living Wage, the local economy could benefit from a £49m economic boost. 
  • 150,000 people working in the Glasgow City Region are paid below the real Living Wage  
  • The real Living Wage is calculated according to what people need to make ends meet. The rate is currently £8.75 outside London, compared to the UK minimum wage of £7.83. 

In a new report commissioned by the Living Wage Foundation, The Local Living Wage Dividend, the Smith Institute found that if a quarter of all low paid workers in the Glasgow City Region were given a pay rise to the real Living Wage, currently £8.75, 37,500 people would see an average annual pay rise of £1,180, or an extra £23 a week.  

This increase in wages would also provide: 

  • A £27 million boost to the local economy  
  • A £16 million tax and benefit dividend to HM Treasury 
  • A £49m economic boost to the city region’s economy if half of the £13 million boost to the Treasury was returned to Glasgow, considering wider economic benefits such as increased local spending by low paid workers.  

There are currently 150,000 earning below the real Living Wage, a total of 19% of all workers in the Glasgow City Region. 

About 270 Glasgow-based employers are accredited as Living Wage employers, including the University of Glasgow, Monorail Music, the BIG Partnership, Digby Brown LLP and nightclub Firewater.

Peter Kelly, Director of the Poverty Alliance who host Living Wage Scotland said:

“This report makes clear the tangible benefits to the economy when more employers commit to paying all of their workers the real Living Wage of £8.75.

“Since Living Wage Scotland launched in 2014, we have been working closely with employers of all sizes from a range of sectors across Scotland to understand the business benefits that come from paying the real Living Wage, and the difference that this can make to workers and their families. This new report is evidence of what we already suspected- that paying the real Living Wage is not only good for the individual and good for business, but also for the wider economy.

“With more than one third of the Scottish workers paid less than the real Living Wage living in the Glasgow City Region, there is much more that needs to be done by local authorities and employers. Getting more workers paid the real Living Wage will not only benefit them and their families, but will make for a healthier local economy which will benefit us all. The evidence is here in this report, now it’s time for action.”

Minister for Business Fair Work and Skills, Jamie Hepburn said:

“The Scottish Government has long championed Fair Work and paying the real Living Wage is part of that: it ensures not only that workers are treated more fairly and they get more money in their pockets - it benefits our economy too. We firmly believe that all workers should get a fair day’s pay for a fair day’s work. We are continuing to support the Poverty Alliance to deliver Living Wage Scotland and are providing them with  £340,000 in 2018-19 to uplift a further 7,500 workers across Scotland to at least the Living Wage rate, giving particular attention to low paid sectors. This report confirms that fair work practices are good for workers, good for business and for the economy.”

The report highlights the role that leading local public and private sector employers such as universities, hospitals, football clubs and city airports can play in providing leadership on the Living Wage. It calls on metro mayors and local authorities to work with these key ‘anchor institutions’ to drive Living Wage take up in their towns, cities and regions. 

The report can be read here.

 

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