Real living wage rises to £9.50 an hour – but childcare workers remain trapped in low wage jobs

Monday, November 9, 2020

Around 250,000 workers are set to receive a pay rise in line with the living wage increase confirmed on 9 November while the childcare sector says that pay can only rise when there is a ‘plan for jobs’.

Sixty per cent of below living wage jobs in April 2020 were held by women.
Sixty per cent of below living wage jobs in April 2020 were held by women.

The real living wage rate is now increasing by 20p from £9.30 to £9.50 an hour across the UK, and by 10p from £10.75 to £10.85 an hour in London.

This means an employee earning the new real living wage will earn 78p an hour more than someone earning the Government's current national living wage for the over-25s, while a worker in London would earn £2.13 an hour more. 

The real living wage is an hourly rate of pay calculated by the Living Wage Foundation charity based on what people need to live on. It's paid voluntarily by almost 7,000 UK employers but is separate to the national living wage, which is a legal minimum rate set by the Government. 

While the new real living wage rates are effective from today (9 November), employers who are already part of the scheme will have six months to bring in pay rises. 

Employers can voluntarily sign up to become living wage-accredited, meaning they pay all their workers at least the real living wage.

Almost 7,000 employers have signed up, including 800 since the start of the coronavirus pandemic. However, there are still many who haven't – new research from the Living Wage Foundation has found that around a fifth of employee jobs still pay less than the real living wage.

Jobs held by women were more likely to be paid below the living wage in April 2020 than those held by men.

This gap has narrowed slightly since 2012 and continued to narrow in 2019-2020, but 60 per cent of below-Living-Wage jobs – 3.3 million jobs – were held by women in April 2020. 

While nurseries and other childcare settings work hard to pay their dedicated staff the wages they deserve, they are hamstrung by low hourly rates they receive for funded places.

‘A plan for jobs needs a plan for childcare’
At the National Day Nurseries Association, chief executive Purnima Tanuku said: ‘Increases to the Real Living Wage are good news for workers in low-paid sectors. While childcare has traditionally been seen in this bracket, the Low Pay Commission has identified the sector as “fee takers” with government funding rates acting as a brake on earnings.

‘In the current pandemic childcare providers are open for children and families but face higher running costs at a time of reduced income. 

As nurseries in Scotland look ahead to the full roll-out of 1140 hours of childcare to three and four-year-olds, they will have to pay staff the Real Living Wage once it becomes a National Standard requirement next year. If this is to be a reality, the sustainable rates paid by councils must clearly show how increases like this have been factored into their funding.

'In England, the Government must factor annual increases like this into the hourly rates providers receive if we are to give children access to high quality early education and childcare. Childcare is essential for any plans for parents to re-enter work or training. A plan for jobs needs a Plan for Childcare.’

'As the Welsh Government reviews the rates for the Childcare Offer and Foundation Phase, they must factor in the increases in staffing costs needed to attract and retain the right staff for the sector.’

How minimum and living wages compare

 

Real living wage

Real living wage (in London)

National living wage

National minimum wage (1)

Ages

All

All

25+

21-24

18-20

Under 18

Apprentice

Current rate (2)

£9.50

£10.85

£8.72

£8.20

£6.45

£4.55

£4.15

The national living and minimum wage usually rises every April, and Government has consulted on raising the national living wage to £9.21 from April 2021. 

The Government has also previously set out plans to expand the national living wage to cover workers aged 23 and over from 2021, and aged 21 and over within five years.

Find out more here

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