Fifth of Scots struggling on pay below real living wage

Workers in the food service sector were found to earn less than the real living wage. Picture: John Devlin

The flatlining economy and stagnant rates of pay has resulted in an increase of 70,000 workers north of the Border getting less than the real living wage over the past three years, according to the Scottish Parliament Information Centre (SPICe).

It means that 467,000 Scots – about a fifth of the country’s workforce – were paid less than the current £8.45 living wage level. This is up from 395,000 in 2013 – an 18 per cent increase.

The real living wage is calculated by a cross section of low pay groups. This is higher than the national minimum wage of £7.20.

Labour said the SNP must treat the figures as a wake-up call and do more to create high-skilled, high-paid jobs, and take action to tackle low pay in sectors where there is a clear need for improvement, like hospitality, services and retail.

Labour economy spokeswoman Jackie Baillie said: “Too many workers in Scotland are waiting for a pay rise. These figures demand to be taken seriously by the SNP government as they show real failures in both the short and long-term approaches to boosting pay.

“The Poverty Alliance’s efforts to promote the real living wage are to be welcomed but the SNP government’s actions have simply not been good enough. The SNP voted against Labour plans for a real living wage guarantee in public contracts and thousands of workers missed out as a result. The SNP Business Pledge scheme, designed to promote the living wage, covers a tiny fraction of Scottish jobs.

“In the long term we need to shift our economy towards the high-skilled, high-paid jobs of the future if Scotland is to really thrive. But the SNP’s decision to slash hundreds of millions of pounds from schools, alongside Scotland’s decline on the education world stage, will make this even harder.

“Tens of thousands of Scots are locked in low pay in an economy that is going backwards. We need to see proper action from the SNP Government.”

The data from Holyrood researchers also reveals that 70 per cent of workers in the accommodation and food service sectors earn less than the real living wage, with 45 per cent in the wholesale and retail trade sector earning less than the real living wage.

Jim McCormick, associate director for Scotland at the independent Joseph Rowntree Foundation (JRF), said: “Scotland has the lowest rate of poverty in the UK, but it will not make progress unless it gets to grip with the scourge of in-work poverty.

“While more people are in work since 2013, thousands are moving into jobs paid below the living wage. Scotland fares well compared to the rest of the UK on low pay, but it is still troubling that one in five workers are not paid the living wage.

“We need the Scottish Government to work with industry to improve pay, progression and productivity in three sectors which account for half of all low-paid Scots: retail, care and hospitality.

“This means focusing their efforts and the new skills investment announced in the draft budget on low-paid and lower-skilled workers. This will drive up skills and job progression to help people move into better-paid and higher-skilled work.”

A report from the JRF recently revealed that there are now 1.1 million more people in in-work poverty across the UK than there were when the economic recovery began in 2010-11. In Scotland, during this time, the average weekly income has fallen by £7 to £413, and now stands as the third highest in the UK.

One in every eight workers in the UK – 3.8 million people – is now living below the poverty line. In total, 7.4 million people, including 2.6 million children live in in-work poverty in the UK today, meaning a record high of 55 per cent people in poverty are in working households.

The UK’s housing crisis, particularly high costs and insecurity in the private rented sector, has been a key factor for many people. In Scotland, 30 per cent of people living in poverty rent their homes from a private landlord. There are also strong links between disability and risk of poverty– 26 per cent of people in poverty in Scotland are disabled, the second highest rate in the UK.