The shopworkers’ union has called for the government to replace the National Living Wage (NLW) with one that better reflects the true cost of living.

Usdaw general secretary John Hannett said the NLW, which guarantees workers aged over 25 a wage of £7.20 an hour, “will not end the scourge of in-work poverty and will not restore a decade of lost wages”.

It is fundamentally unfair to pay young workers less

John Hannett, general secretary, Usdaw
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Mr Hannett, speaking this morning at the annual Trade Union Congress in Brighton, said the real Living Wage is more than a pound ahead of the government rate and more than two pounds ahead in London.

“A real Living Wage for all workers is our objective, but improving hourly rates alone is not enough,” he said.

“We need to look at all aspects of the pay package and availability of hours, to get workers the best possible deal.”

The current National Living Wage doesn't apply to workers aged under 25. Image by Igor Stepovik /Shutterstock.com

Mr Hannett also criticised the NLW for excluding employees aged under 25. “Usdaw has negotiated the removal of youth rates, because it is fundamentally unfair to pay young workers less.

"All workers must stand together to make it clear that we will not allow young people to be left further behind.

“The National Living Wage is a step forward in the fight against low pay, but it is just that – a step.

“If we are to eradicate poverty wages then we need: Stronger collective bargaining agreements; every workplace organised, and an enforcement regime that is focussed and properly resourced.”

Last month, the Institute of Economic Affairs said the government should scrap the NLW and replace it with a simplified National Minimum Wage.

It said the policy does nothing for people who are unemployed, working part-time or in poverty.

The Living Wage Foundation, which campaigns for higher wages linked to the cost of living, said the government’s statutory rates are effectively just increases to the National Minimum Wage.

A spokesperson told Bilgo that more than 2,700 employers had voluntarily signed up to pay workers the higher Living Wage of £8.25 an hour, or £9.40 an hour in London. 

“An independent study examining the business benefits of implementing a Living Wage policy in London found that more than 80% of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25%," the spokesperson said.

“Paying people fairly for the work they do is not only the right thing to do but it is  sensible business strategy for increased success.”