Scotland

More than 400,000 Scots workers paid less than the living wage

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Image caption The Living Wage is increasing by 20p to £7.85 an hour from Monday

More than 400,000 workers in Scotland are still being paid less than the living wage, according to a study.

Auditors KPMG released the figure as the UK living wage increased by 20p to £7.85 an hour - higher than the legal minimum wage of £6.50.

It said many of those earning less than the living wage worked in the retail, catering and care sectors.

About 60 companies in Scotland, including Heart of Midlothian FC, have signed up to be living wage employers.

The living wage is calculated independently of government and is based on a combination of basic living costs and income distribution.

It supporters have said it leads to increased staff motivation and retention rates, reduced absenteeism and recruitment costs.

But some firms have said they cannot afford to pay it.

KPMG spokeswoman Margaret Butler said the figure of 414,000 workers being paid below living wage levels suggested that "too many Scottish employees are stuck in the spiral of low pay".

'Debt levels'

Across the UK, 5.2 million people, or 22% of the workforce, were said to be paid less than the living wage - an increase of 1% over the past year.

Ms Butler said: "The research identifies statistics and trends, but it also reports the concerns of people earning below the living wage who expect their finances to worsen during the next 12 months and shows that debt levels have continued to rise among this group.

"Unless wages rise, a significant sector of the Scottish population will see themselves caught between the desire to contribute to society and the inability to afford to do so."

Ms Butler added: "Business benefits of the living wage include higher staff retention and productivity, and nearly 60 responsible businesses in Scotland such as SSE and Glasgow Caledonian University recognise this.

"The living wage may not be possible for every business, but is certainly possible as well as enlightening to explore the feasibility of paying it."

In the past year Scottish-based organisations including Standard Life, RBS and the SECC have all signed up to become accredited employers.

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Image caption Ann Budge, the owner of Hearts, announced last week that the club had signed up to the living wage scheme

And Heart of Midlothian announced last week that it would be the first football club in Scotland to agree to the deal.

Owner Ann Budge told the Edinburgh club's website: "We believe it is entirely in keeping with the values we hold dear as a club."

Scottish Finance Secretary John Swinney is to meet some of the employers who have agreed to pay the increased living wage rate later.

Speaking ahead of the event, he said: "We are firmly of the view that employers should reward their staff fairly and encourage businesses throughout the country to support the living wage campaign."

The government is funding a pilot by the Poverty Alliance over the next year, to promote take up of the living wage and increase the number of employers paying it.

'Genuine momentum'

The director of the Poverty Alliance, Peter Kelly, said: "The living wage in Scotland is now gaining genuine momentum with employers - the number of employers paying it here has tripled from 20 to 60 in the last six months.

"But there is no room for complacency. Low pay and in-work poverty is one of the main causes of child poverty in Scotland, so we need to build on the good work that has already been done.

The Living Wage Foundation said the new £7.85 rate "reflects the real cost of living, rewarding a hard day's work with a fair day's pay".

Director Rhys Moore said: "Low pay costs the taxpayer money - firms that pay the minimum wage are seeing their workers' pay topped up through the benefits system.

"So it's right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process."

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