More than a quarter of workers in South Tyneside earn less than the Living Wage, new figures reveal today.
Statistics by financial experts KPMG, show 27% of employees in the borough – 11,000 people – earn less than £7.85 per hour, the current Living Wage for areas outside of London and the amount experts believe individuals need to earn to cover the basic costs of living.
Many are forced to live hand to mouth.Mick Thompson
That is distinct from the Government’s National Living Wage of £7.20 an hour.
South Tyneside is higher than both the national figure of 23% and the regional average is 25%.
South Shields MP Emma Lewell-Buck claims their plight is about to get worse.
She said: “Work should always pay a decent wage and it’s very disappointing to hear that more than one in four people in our borough are earning below the Living Wage.
“It shows that, despite what David Cameron tells people about the economy doing well, the truth is much more complicated.
“A lot of the jobs created under this Government have been low paid and insecure, and so being in work is no longer a sure way to financial security.”
She added: “The situation is not going to improve if the Government’s plans to cut tax credits go ahead in April.
“Tax credits were introduced by Labour as a way of supporting the lowest paid and making sure people in work were properly rewarded.
“Without them, families stand to lose an average of £1,300 a year, including more than 5,000 families in Shields alone.
“That means things will get even worse for the people who are earning below the Living Wage.”
Today’s national figures show the proportion of workers earning less than the Living Wage has risen for the third year running.
The data also shows that part-time jobs are three times as likely to pay below £7.85 per hour than full-time roles and 29% of females earn less than the Living Wage compared to 18% of males.
Young workers remain the most likely group to be caught in the ‘working poverty’ trap with 72% of 18-21-year-olds currently earning less than the Living Wage.
Mick Thompson, senior regional partner for KPMG, said: “There is still a worrying proportion of people across the North East being paid below the Living Wage.
“With the cost of living still high and household finances being continually squeezed, many are forced to live hand to mouth.
“The figures released today show that there is still more to be done if we are to eradicate in-work poverty.
“For some time it was easy for businesses to hide behind the argument that increased wages hit their bottom line, but there is ample evidence to suggest the opposite – in the shape of higher retention and higher productivity.
“It may not be possible for every business, particularly at a time when many North East businesses face the challenge of maintaining margins in order to stay competitive, but it is certainly not impossible to explore the feasibility of paying the Living Wage and recognise the long-term benefits it brings.”