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Disparity in pay levels

Average pay rises while a fifth struggle on breadline

PayWide disparities in pay have been revealed in new research which shows Scotland has the third highest average wage in the UK while a fifth of the workforce earn less than the voluntary living wage.

Overall average pay in Scotland rose by 2.6%, below the UK average of 3% but at £15.24 per hour, it is the third highest paid region in the UK after London and the South East.

At the bottom of the pay scale, just under one five workers in Scotland – 19% or 430,000 – are paid less than the voluntary Living Wage.

The research, by Markit for KPMG, shows that part-time jobs are three times more likely to pay below £8.25 per hour than full-time roles.

More than a third (39%) of part-time workers now earn less than the voluntary Living Wage, compared with around one-in-ten full-time workers (12%).

Despite accounting for less than a third of all Scottish jobs, there are more part-time roles paying less than the Living Wage (245,000) than full-time jobs (187,000). 

The research reveals that across the UK 5.6m people are paid less than the voluntary Living Wage, constituting 22% of all working people.

Proportionally, Northern Ireland has the highest number at 27%, followed by the East Midlands at 26%.  The lowest proportion is in London and the South East, both at 18%, followed by Scotland at 19%.

The research also indicated that the degree of pressure on household finances was the lowest in five years of data collection, helped by the low inflation backdrop and more stable household debt trends.

Jenny Stewart, spokesperson for the Living Wage at KPMG in Scotland, said: “Previously businesses worried that increased wages hit their bottom lines, but there is good evidence to suggest otherwise.

“By paying the Living Wage to our service providers we have seen improved staff morale, a rise in service standards, improved retention of staff and increased productivity, helping offset increased wage bills.”

Peter Kelly, director of the Poverty Alliance said: “There is a need for employers to go further than the government minimum in ensuring that their employees earn a real Living Wage. 

“Tomorrow, we find out the new rates – which will lead to pay rises for thousands of staff across more than 600 accredited Living Wage employers in Scotland.”  

 

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