Data puts pressure on firms

Third of employees in rural Scotland affected by living wage

George Osborne Commons 2A third of employees n Scotland’s rural areas are likely to see their wages rise under the new National Living Wage, but this will add significantly to costs for businesses, according to a new study.

The Resolution Foundation has claimed the new rate of £7.20 an hour for workers aged 25 and over – which comes into effect in April – will impact on 23% of all employees across Britain by 2020, but disproportionately in the north.

A third (33%) of Clackmannanshire employees will be affected, followed by 32% in Dumfries and Galloway (32%) and 31% in East Renfrewshire.

Employees are expected to be less affected in cities, such as Dundee (18%), Edinburgh (17%) and Aberdeen (16%).

The figures tend to be higher in the north with 28% of employees in Sheffield affected, 27% in Nottingham and 26% in Birmingham. These compare with Cambridge (15%), London (14%) and Oxford (13%).

The National Living Wage was announced by the Chancellor George Osborne in last year’s Budget.

Conor D’Arcy, policy analyst at the Resolution Foundation, said: “While our analysis suggests the pay rise should be affordable for most firms, implementing the new wage floor will be challenging for some employers.

“Politicians must work closely with employers to ensure that the national living wage is a success, particularly in low-paying sectors.

“It will take more than a higher wage floor to tackle Britain’s low pay problem. Governments and employers need to boost progression, making the most of employees’ existing skills and helping them to develop new ones. With the NLW set to rise significantly in coming years, it’s vital that positive steps are taken now before the higher wage floor begins to bite.”

The think tank is also calling for an expansion to the voluntary living wage of £8.25.

The Scottish government points out that there are now more than 400 organisations paying the living wage in Scotland, compared to just a handful a year ago and more than 80% of Scots receive £8.25 or higher.


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