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

Published 3rd September 2018 at 9:09am

In a new report commissioned by the Living Wage Foundation, The local Living Wage dividend Report, the Smith Institute found that if just a quarter of those living on low incomes in the UK’s 10 major city regions saw their pay raised to the real Living Wage, those areas could benefit from a £1.1bn boost to the economy.

The research found that if a quarter of all low paid workers in the Sheffield City Region were given a pay rise to the real Living Wage, currently £8.75, 36,250 people would see an average annual pay rise of £1,020, or an extra £20 a week.

This increase in wages would also provide:

  • A £22 million boost to the local economy
  • A £13 million tax and benefit dividend to HM Treasury
  • A £41m economic boost to the city region’s economy if half of the £13 million boost to the Treasury was returned to Sheffield, considering wider economic benefits such as increased local spending by low paid workers.

Sheffield City Region has the highest percentage of employees earning below the real Living Wage than any other region considered in the report. There are currently 145,000 earning below the real Living Wage, a total of 27% of all workers in the Sheffield City Region.

Sheffield-based Living Wage employers include MJ Glesson, Wrigleys Solicitors, Sheffield Young Carers Project, and Seven Hills Bakery.

Dan Jarvis, Mayor of Sheffield City Region, said: “I welcome the Living Wage dividend report commissioned by the Living Wage Foundation. It shows that if just a quarter of all low paid workers in the Sheffield City Region were paid the Living Wage, more that 36,000 people would see an average annual wage rise of more than £1,000. What’s more, our local economy would also see a boost of £22 million.

“It is concerning that Sheffield City Region has the highest percentage of employees earning below the real Living Wage of all the regions considered in the report.

“Ensuring that people are paid a proper wage which meets the cost of living is vital for residents and good for the economy. That’s why as Mayor I have committed to championing the Living Wage for all employees of the Sheffield City Region and those companies that we contract with. I would encourage employers from across the region to take the same steps.”

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, and to integrate the Living Wage to their economic development strategies. It recommends that they:

  • Become accredited Living Wage employers
  • Set clear targets for Living Wage take up in their cities and regions, and develop a plan with other key local ‘anchor institutions’ for how these will be met
  • Use their powers of planning and public procurement to encourage more local employers to commit to ensure their staff can live on.
  • Investigate the potential to create new real Living Wage buildings, zones and hubs in key public spaces

Lola McEvoy, Senior Campaigns Manager of the Living Wage Foundation, said:  “By championing the real Living Wage leading mayors and local authorities can build successful, dynamic local economies – and most importantly ensure that the proceeds from growth are fairly shared. There are some fantastic organisations in Sheffield already paying the Living Wage, but we must see more step up to tackle problems of in-work poverty, regional inequality, and weak productivity.”

Paul Hunter, Deputy Director of the Smith Institute, said:  “Big employers often like to talk about the positive role they play in their local community. One way that they can go beyond the warm words is to pay their staff the Living Wage and demand their suppliers do the same. This is not just about good corporate citizenship. Evidence shows workers paid fairly are more productive. The local economy in Sheffield could be boosted by £41m if just 25% of those currently earning below the Living Wage were uplifted.”