It’s difficult to avoid news stories about the rising cost of living at the minute.
Energy prices are soaring. The cost of everyday items is on
the increase. People from all backgrounds across the country are struggling to
make ends meet. But it’s especially tough for those on lower incomes.
In a lot of news reports about the impact of the current
economic climate, you might hear the terms National Minimum Wage, National Living
Wage and Real Living Wage being used interchangeably.
But they are all actually slightly different.
What is the National Minimum Wage?
The National Minimum Wage was introduced by the Government in 1998 and became law the following year. It initially applied to workers of all ages.
The main aim of the National Minimum Wage was to protect low-paid workers and help move people out of poverty.
But the minimum wage rates are also set at a level that also helps protect businesses, jobs, and the UK economy. It has always been a balancing act.
There have been a variety of changes to the National Minimum Wage over the last couple of decades.
From the 1st of April 2022, the National Minimum Wage rates apply to any workers under the age of 23.
The current rates at the time of writing are:
· Apprentice : £4.81 per hour
· 16-17 Years Old: £4.81 per hour
· 18-20 Years Old: £6.83 per hour
· 21-22 Years Old: £9.18 per hour
For workers over the age of 23, the higher National Living Wage now applies. There are plans to reduce the threshold of the National Living Wage to 21 by 2024.
What is the National Living Wage?
The National
Living Wage was introduced in 2016, and initially applied to all adult
workers over the age of 25.
This threshold has been reduced over time, and the National
Living Wage currently applies to all adult workers aged 23 and over.
The purpose of the National Living Wage for adult workers was
more about the UK economy than protection of workers. It was explained by the
UK Government that they wanted to move from a “low wage, high tax, high
welfare society to a higher wage, lower tax, lower welfare society”.
So, the driving force behind the introduction of the
National Living Wage was to reduce the reliance on the UK benefits system.
The positive upside for adult workers was that they were
able to gain the security of a higher minimum rate of pay. But it is still
balanced against what would be affordable for businesses and set at a rate that
wasn’t anticipated to lead to job losses.
At the time of writing, the current National Living Wage is £9.50
per hour.
This rate is the same wherever you live in the UK, which is
one of the main criticisms of the National Living Wage.
The cost of living varies based on where in the country you
live. A useful article by ABC
Finance shows the different cost of things like rent, groceries and
restaurant prices in different cities across the UK.
There’s possibly no surprise that areas like London, Milton
Keynes and Bath have the highest cost of living. Areas such as Derby, Newcastle
and Liverpool are more affordable to live.
As a result, the £9.50 per hour offered by the National
Living Wage doesn’t support adult workers equally across the country. And many
believe that £9.50 per hour isn’t enough to support the reality of modern living
at all.
What is the Real Living Wage?
The Real Living Wage is an initiative pioneered by The Living Wage Foundation.
The driving force behind the Real Living Wage is to encourage employers to pay all workers a minimum hourly rate that helps them meet the everyday needs of modern living.
It’s an independently calculated figure that takes into account the variable cost of living in different areas of the UK and isn’t affected by political considerations.
The Living Wage Foundation recommends that all employees over the age of 18 are paid a minimum of:
· £10.90 per hour across the UK
· £11.95 per hour in London
The Real Living Wage is completely voluntary for businesses, but at the time of writing more than 11,000 businesses across the UK have currently signed up to the initiative.
Many businesses have committed to pay the Real Living Wage because they believe it is the right thing to do. They want to make sure their staff are fairly compensated and able to live comfortably.
But there are also business benefits to paying the Real Living Wage.
Case studies on the Living Foundation Website show that there can be reductions in staff turnover, increases in staff motivation and improvements to the reputation of businesses when they commit to the Real Living Wage.
MCS Cleaning: Committed to supporting our colleagues
When we founded MCS Cleaning in 2008, we agreed that we
would always retain the culture of being a family run business that really cares about our colleagues, clients and community.
It’s one of the reasons so many of our team and customers
have stayed with us for so long.
In addition to paying all our employees fairly, we also have
different initiatives to help our colleagues develop and grow, including:
· Training and professional development programmes
· Company-wide celebrations of achievements
· Performance rewards
· Allowing time for employees to support local
charities and community projects.
Are you looking for a commercial and domestic cleaning company in Berkshire and the Midlands that cares? Call us on 01530 382006 or send us an email.
We’ll be happy to discuss your project and see how we can help you.
If you want to find out more about our business, download our brochure.
It’s got all the information you need to reassure you that MCS is the right
choice for you.
