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Tackling cost of living pressures in Wales

2 August 2022

Image to indicate cost of living increase

A report on cost of living pressures, published by the Economy, Trade and Rural Affairs Committee, includes recommendations from Cardiff Business School’s Dr Deborah Hann.

This includes a recommendation that the Welsh Government should drive the accreditation of all Welsh public sector organisations as Living Wage employers, in particular delivering this for workers in Welsh local authorities and health boards.

The committee have also adopted Dr Hann’s recommendation that Welsh Government should consider what lessons can be learnt from voluntary regulation schemes for private sector employers and how it could support replicating the benefits of this approach in other parts of Wales.

In her role as Co-Chair of Citizens Cymru Wales, Dr Hann gave testimony to the Committee on a range of topics including the groups of people who are being most affected by the increase in cost of living, the Real Living Wage, and the labour market.

Dr Hann’s testimony, particularly on the benefits of the Real Living Wage, was informed by her research in collaboration with Business School colleagues Dr David Nash and Professor Edmund Heery.

On the Real Living Wage, Dr Hann said: “It is the only wage level that is calculated to take into consideration the cost of living. It is 40p an hour higher than the national living wage, which is not technically a living wage.”

Dr Hann said the gap between the National Living Wage and the Real Living Wage for a low-income worker could be £700-£800 a year and “that gap reflects a lack of ability to just meet basic costs.”

Dr Hann pointed to a success in higher education institutions being accredited as living wage employers, with over 2,000 people’s pay increasing to a ‘cost of living wage’, and Bridgend local authority, where 1,000 workers have been lifted above that gap. She said similar increases across local authorities would be easy to deliver and life wages of approximately 14-15,000 people in Wales to a level that would help them address cost-of-living issues.

Paul Davies MS, Chair of the Economy, Trade and Rural Affairs Committee wrote in the foreword: “The escalating cost of living can be felt across Wales and is affecting almost every area of public and private life. With wages and fixed incomes not stretching as far people are having to tighten their belts and often make difficult choices.”

It is heartening to see the Welsh Government recommending the adoption of the Living wage. The Real Living wage would allow those struggling to earn enough to live, but also by accrediting as Living Wage employers, public sector institutions send out an important message to other local employers and the local community as to the values Wales holds important.

Dr Deborah Hann Reader in Employment Relations

“The recommendation is only the first step however. I look forward to local authorities and health boards throughout Wales accrediting as Living Wage employers stepping up and stepping forward and delivering a pay increase to thousands of workers from Anglesey to Bridgend and Aberyswyth to Builth Wells.”

Read the full report.

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