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Insider UK
Science
David Dubas-Fisher & Peter A Walker

The Real Living Wage could add £1.7 billion to the economy

If just a quarter of low-paid workers in Scotland were given a pay rise to the Real Living Wage, it could put an extra £114.1 million back into the country’s economy.

Set by the Living Wage Foundation and based on the cost of living, it is currently £10.90 across the UK.

Research commissioned by the foundation and conducted by the Smith Institute found that if just a quarter of those earning below the figure saw their pay rise to the Real Living Wage, the increase in wages, productivity and spending would deliver £1.7bn back into the UK economy.

Currently, 221,000 jobs in Scotland pay below the Real Living Wage - around 9%.

There are over 11,000 Living Wage Employers across the UK, with 2,900 based in Scotland, including SSE, abrdn, AG Barr and Mackie’s of Scotland.

Living Wage employers commit to voluntarily go above and beyond the government’s National Living Wage and pay all their staff - including contracted workers - the higher wage rate.

Regions and city regions across the UK would receive an economic boost if a quarter of the low-paid workers were lifted onto the Real Living Wage:

Region/country

Economic growth

London

£208.3m

South East

£197.3m

North West

£190.8m

Yorkshire and The Humber

£165m

West Midlands

£147.5m

East England

£144.2m

South West

£137m

East Midlands

£125.7m

Scotland

£114.1m

Northern Ireland

£84.3m

Wales

£75.4m

North East

£74.6m

Katherine Chapman, director of the Living Wage Foundation, said: “Paying the Real Living Wage isn’t just the right thing to do for workers, it’s good for business and the wider local economy too.

“In these volatile and tough economic times, paying the Real Living Wage helps tackle in-work poverty and provides a vital economic boost to the UK economy.

“With the cost of living rising, it’s never been more important for employers who can, to step up and provide a wage based on the cost of living, joining over 11,000 Living Wage Employers across the UK.”

Paul Hunter, head of research at the Smith Institute, said: “The Living Wage can help deliver a double dividend for local communities.

“Decent wages not only help local families avoid financial hardship, but they can also support local growth through productivity gains and by putting extra wages in the pockets of local consumers.”

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