The Need for a Real Living Wage

The issue of low-paid work is one that workers across the globe and throughout the centuries have struggled against – and it is one that is becoming increasingly pressing across the UK today. Studies in 2017 found that 60% of those living in poverty in Britain are in working families. However, any measures taken have repeatedly failed to tackle the central issue. The government’s rebranded minimum wage, now known as a ‘National Living Wage’, falls massively below the level needed to make ends meet. Meanwhile, even the Living Wage Foundation’s living wage rate is increasingly failing to keep up with the cost of living in some of the country’s most expensive cities. The prevalence of low pay and the consequences it has on people’s lives can be usefully illustrated by the current situation in Oxford.[1]

Oxford is a city of contradictions. The university with its vast wealth and influence exists alongside ten neighbourhood areas which are amongst the 20% most deprived in England.[2] The city of dreaming spires to which tourists flock is also the city in which a 2014 study found a quarter of children living in poverty.[3] The wealth of the city is not shared out equitably, with pockets of affluence and poverty operating side by side. These contradictions are compounded further by the fact that Oxford has lower than average unemployment: estimates in 2017/8 found that Oxford’s unemployment rate was 3.4%, compared to the national average of 4.3%.[4] The biggest problem is not that those in Oxford can’t find work: the issue is that this work doesn’t pay enough for people to live.

Since 2009, Oxford City Council has paid its staff and contracted employees an ‘Oxford Living Wage’, set at 95% of the London Living Wage rate. As of April 2019, the Oxford Living Wage is £10.02 an hour. However, the only legal requirement currently placed on employers is that they pay the government’s so-called ‘National Living Wage’ of £8.21 to workers over the age of 25. For those aged under 25, even the pretence of describing minimum wage as a living wage is dropped: from April, 21 to 24 year olds must be paid a minimum of £7.70 an hour, while the rate for 18 to 20 years old is £6.15. The consequence of this is that many workers in Oxford are forced to try and live on wages which are fundamentally insufficient.

One of the biggest problems facing low-paid workers in Oxford is the cost of housing. A 2018 Unison report on rent costs for public sector workers identified Oxford as the most expensive local authority for housing in the South East. The report found that an NHS porter earning £15,404 annually – slightly above minimum wage – would typically have to spend 84% of their monthly take-home pay on rent, leaving just £180 a month for all other living costs.[5] That means £180 for food, energy, transport, and other necessities – let alone leisure opportunities and any other costs beyond mere subsistence. These low wages directly link to the poverty found in the city’s most deprived areas.

These astronomical costs of living are not solved by payment of the Living Wage Foundation’s ‘Real Living Wage’. A number of employers in Oxford are accredited by the Foundation as Living Wage employers, including Oxford University and sixteen of its constituent colleges. However, the ‘Real Living Wage’ is also insufficient in a city as expensive as Oxford. From April, the Foundation’s national rate is £9 per hour – meaning that the Living Wage Foundation’s rate is actually closer to the government’s National Living Wage than to the Oxford Living Wage. In the City Council’s own review, 86% of the low-paid workers they surveyed felt that the Real Living Wage was not enough to live on.[6] This situation is found in other cities with similarly (anomalously) high costs of living – for instance, campaigners in Cambridge have begun to argue for a specific Cambridge Living Wage. However, in the meantime, employers in cities like Oxford can be branded as Living Wage employers without actually paying their workers enough to live on.

The consequences of low pay are stark and multifaceted. Though wage issues are normally considered in material terms, common sense tells us that the impact of low wages on an individual’s broader quality of life is likely to be significant. Long hours and multiple jobs with poor pay have demonstrably negative affects on psychological as well as material well-being: a 2014 report by Public Health England noted that, as well as negatively impacting physical health, low pay can be linked to higher incidences of poor mental health.[7] The most revealing statistic on inequality and poverty in Oxford is the differences in life expectancy between its different areas. A man born in one of the city’s most deprived wards can expect to die nearly ten years earlier than a man born in one of the most affluent areas.[8]

The Oxford Living Wage isn’t a solution to all the problems of deprivation and inequality in the city. Housing costs mean that someone earning the Oxford Living Wage would still typically have to spend around 70% of their monthly take-home pay on rent. Of those surveyed in the City Council’s review, only a narrow majority of 57% felt that the Oxford Living Wage would be sufficient.[9] Because of this, the Oxford Living Wage has to be the minimum demand for workers in the city. Other steps are needed to dismantle the structural inequalities within the city, and deal with unsustainably high living costs. However, tackling the problem of low-paid work is a crucial first step in alleviating the worst aspects of poverty, deprivation and inequality in Oxford. The adoption of the Oxford Living Wage across the city would also be important in establishing what should be an uncontroversial principle throughout the country: that workers should be paid a wage that they can actually live on.


[1] https://www.theguardian.com/society/2017/may/22/record-britons-in-work-poverty-families-study-private-rented-housing

[2] Oxford City Council, ‘English Indices of Deprivation: Oxford Results’, 2015 (https://www.oxford.gov.uk/downloads/file/2248/indices_of_deprivation_2015_oxford_report)

[3] End Child Poverty, ‘Child Poverty Map of the UK’, October 2014 (http://www.endchildpoverty.org.uk/images/ecp/Report_on_child_poverty_map_2014.pdf)

[4] https://www.oxford.gov.uk/info/20124/economy/454/economic_statistics

[5] Unison Report, ‘Nothing going on but the rent: The housing cost for public service workers in England’, 2018

[6] Oxford City Council, ‘Promoting the Oxford Living Wage – Report of the Oxford Living Wage Review Group’, March 2018 (http://mycouncil.oxford.gov.uk/documents/s41002/Report%20of%20the%20Oxford%20Living%20Wage%20Review%20Group%20v1.0%20for%20Scrutiny%20Committee.pdf)

[7] Public Health England & UCL Institute of Health Equity, ‘Local action on health inequalities: Health inequalities and the living wage’, September 2014 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/355785/Briefing6_Living_wage_health_inequalities.pdf)

[8] https://www.oxford.gov.uk/downloads/file/1085/inequalities_in_life_expectancy

[9] Oxford City Council, ‘Promoting the Oxford Living Wage – Report of the Oxford Living Wage Review Group’, March 2018