Low-paid workers ‘more than £1000 worse off’ than this time last year due to cost of living crisis

Workers on low pay have been hit with a ‘double whammy’ of wage freezes and soaring inflation, leaving them more than £1000 worse off than this time last year, a trade union has warned.

More than 1.6million people in the UK work for low pay, with many of them expected to feel the crunch of a looming cost of living crisis.

At a glance: 5 key points

• Analysis by the RMT transport union found that workers on the National Minimum Wage would need £1,252 more a year to prevent a real-terms pay cut, while a worker on the Real Living Wage would need £1,395 more.
• The Retail Price Index (RPI) reached 7.5% in December 2021, with inflation at its highest rate in 30 years according to the ONS
• According to the Low Pay Commission, 1.6million people in the UK were paid below or 5p within the National Minimum Wage or National Living wage throughout 2021, with workers in Northern Ireland and the North of England most likely to be on low pay
• There has been a rise in industrial action in recent months, with more expected to follow, particularly among low paid workers in the face of a cost of living crisis which is expected to worsen 
• Rail and train cleaners across the South-East and West Coast services are currently either balloting for strike action or on strike for a pay rise, with all the cleaners involved paid either the National Minimum Wage rate of £8.91 per hour or the Real Living Wage rate of £9.90 per hour

What’s been said?

RMT General Secretary Mick Lynch said: “Many workers have been hit by a double whammy of pay freezes and soaring inflation and no more so than those who were already on low wages.

“This report shows the devastating effect of inflation on the wage packets of the heroes who have kept our essential services running through the pandemic. It’s a national disgrace that so many of these workers, clapped, praised and glad-handed by the great and the good are now expected to put up with pay cuts that leave these already low-paid workers struggling to make ends meet.

He added: “It also shows the value of fighting unions because left to their own devices, there’s no doubt the spivs and profiteers who leech off our rail network would be quite happy to carry on in the same old way. Well, RMT is not going to let that happen.”

A HM Treasury spokesperson said: “We’re providing support worth around £12 billion this financial year and next to help families with the cost of living. We’re cutting the Universal Credit taper to make sure work pays, freezing alcohol and fuel duties to keep costs down, and providing targeted support to help households with their energy bills.

“We’re also raising the National Living Wage to £9.50 per hour from April, meaning people working full time on the National Living Wage will see a £1,000 increase in their annual earnings.”