Wider adoption of the real Living Wage could provide an economic boost to UK cities worth over £1.1bn, according to new research by the Smith Institute.
The Smith Institute found that if just a quarter of those on low incomes saw their pay raised to the real Living Wage based on what people need to get by, in ten of the UK’s major city regions, a subsequent increase in wages, productivity and spending could deliver a £1.1bn economic boost to major UK cities.
The report also found that if a quarter of low paid workers were lifted onto a Living Wage of £10.20 in London, and £8.75 in the rest of the UK, in ten city regions:
- Over half a million workers would secure an average annual pay rise of over £1,700.
- UK city regions would benefit from a £560m boost; as well as a more inclusive local economy.
- The Treasury would benefit from £350m in increased tax receipts and benefit savings.
- If half of this £350m boost to the Treasury was returned by central government to city regions, the local economic benefit – a “Local Living Wage Dividend” – could increase to £1.1bn, when taking into account wider economic benefits such as increased local spending by low paid workers and government driving further economic activity.