Reasons to Pay Employees a Real Living Wage
The Real Living Wage is recommended over the normal ‘minimum wage’, which is leaving people in full-time having to visit food banks in some cases. Iceland’s manager recently said that some people are even not buying potatoes or root veggies, as they can’t afford to boil them, once they get home.
You can’t just ‘roll up at a food bank’ as some MPs suggest. You usually have to prove income. Jack Monroe (who created the Vimes Food Index) says that the true cost of supermarket goods is making champagne cheaper in comparison than apples, which have gone up by way more in recent years.
At present, the government’s Living Wage (minimum wage) is less than the Real Living Wage (and is voluntary, though many employers are now choosing to use it). It costs less long-term, as staff on good pay and conditions stay longer, so it saves having to re-hire and advertise for staff yet again.
Reasons to Pay a Real Living Wage
Staff that are well looked after (including paid well) tend to be happier and healthier, and have a better life/work balance. They can buy nice things for their homes, eat better and afford child care.
The legal living wage is around £1.48 less than the voluntary Living Wage. That works out around an extra £60 a week, if working full-time. This can cover the cost of a dental check-up, a couple of pairs of quality vegan shoes, or calling someone out to fix a leaky appliance or dodgy boiler. The cost of a train fare to visit a relative.
Think of the difference that £60 a week can make to one employee’s life.
In February 2024, the government named 500 companies that were not even paying minimum wage (including high street brands who have been ordered to pay millions in backdated salaries). Most said it was due to ‘genuine errors’, and one even blamed the government for increasing the minimum age.
Clean for Good (London) is a company that pays all employees the voluntary Living Wage, in an industry (housekeeping for hotels) that is known for low salaries, while guests pay eye-popping prices for luxury suites.
Which Supermarkets Pay a Living Wage?
German-owned Aldi and Lidl do (just like furniture-company IKEA, due to be Swedish-owned).
Manchester’s Unicorn Grocery pays a proper Living Wage, with casual staff paid 80% of that (or the real Living Wage, whichever is higher).
Do MPs Know Prices of Everyday Goods?
Some do, others don’t. The ‘basket of goods’ is how the government’s Living Wage is calculated. It includes ‘everyday items’ like bread, milk and vegetables, with new items added yearly (this year’s additions were an air-fryer and hand gel).
Based on average earnings, the Real Living Wage (voluntary) is calculated by real people, not quangos at Whitehall on high salaries.
MPs present receive a salary of around £84K (plus expenses). When he was Prime Minister, David Cameron famously got cornered when asked if he knew the price of a loaf of bread. He got out of it by saying that he baked his own bread using granary flour. Then made things worse, by recommending a £100 bread-maker and premium flour (that cost over £30 for a bulk bag).
Similarly, Rishi Sunak when asked replied that as a health-conscious family, they all have different Hovis ‘seeded breads’. Both answers are fine – but not when they are then cutting benefits from the poorest in society, who then can’t afford to buy bread.
You can look up how your MP voted to cut or retain welfare benefits. There’s something that sticks about multi-millionaires cutting benefits of the poorest in society, whatever their arguments. At least they should try to live on them for a while.
To give him credit, former Tory MP Matthew Parris did try years ago in Tyneside. He spent £11 on food, and 62p for a bus to a £2 football game.
And when he had 61p left, he ran out of money for the meter and could not even afford to buy a drink at the local working men’s club. He soon gave up politics, and now writes (often excellent) articles for newspapers on society.
If you do not ensure that people are being paid a living wage, then you are going to have people who rely on government assistance. It’s that simple. Ron Crumpton
A real living wage makes your business better
When wages sit too close to the edge, everything at work becomes less predictable. People leave with little notice, shifts get messy, and managers spend time firefighting. On the other hand, when pay meets real costs, work tends to feel more stable. Staff can plan their lives, and you can plan your rotas.
This matters in roles where reliability is the job. Think retail, care, hospitality, admin, and trades. A late bus, an unexpected bill, or a broken phone can spiral fast when there’s no financial buffer. Pay that covers basics doesn’t remove every problem, but it reduces the constant strain that causes avoidable disruption.
You keep good people longer, and cut hiring costs
High turnover isn’t just annoying, it’s expensive in ways that don’t show on one invoice. Each leaver creates a chain reaction: advertising, screening, interviews, references, onboarding, and training. While that’s happening, someone else carries the load. Usually it’s a supervisor, a senior care worker, or the most reliable person on shift.
Better pay helps you hold on to the people who already know your systems. As a result, you spend less time teaching the basics and fixing early mistakes. You also cut the “soft costs” that add up quietly:
- Manager time spent chasing candidates, rewriting rotas, and covering gaps
- Agency fees when you need someone tomorrow, not in three weeks
- Onboarding errors like wrong orders, missed checks, or cashing up mistakes
- Lost output while new starters learn, even when they’re trying hard
Retention isn’t only about money, but pay sets the tone. If someone can earn more for less stress elsewhere, they will move. A real living wage makes staying feel sensible, especially for experienced staff.
Motivation and customer service improve
Money stress is like working with a low battery. People can still do the job, but it takes more effort. Over time, that shows up as tiredness, distraction, and more sick days. It can also lead to short tempers, slower responses, and less patience with customers.
When employees can cover essentials, they’re more likely to arrive on time and focused. They’re also more able to swap shifts fairly, rather than scrambling for extra hours at the last minute. That steadiness tends to lift customer service in a way you can actually see.
Picture a small café. If the team changes every month, regulars notice. Orders take longer, the milk gets steamed wrong, and complaints rise. If the same staff stay, they remember names, spot allergies, and keep the place running smoothly. People come back because it feels welcoming, not chaotic.
Pay doesn’t replace good training or good leadership. Still, it gives those things a chance to work.
Job adverts stand out
Many applicants scan for one thing first: the hourly rate. If it looks tight, experienced people often keep scrolling. Pay a real living wage and you widen your pool straight away, including candidates who already know the work.
That can improve the whole hiring process. You may see fewer interview no-shows, because applicants take the role seriously. Acceptance rates can rise too, because the offer feels workable. Just as important, you get a better “fit” because expectations are clear from the start.
This helps roles with awkward hours, such as evening hospitality, early cleaning shifts, or weekend care visits. When the pay meets real costs, people are less likely to treat the job as a short stopgap. That gives you a better chance of building a settled team.
Others notice how you treat your staff
Most businesses rely on trust. Customers want to feel good about where they spend money. Clients want suppliers who won’t bring drama to a contract. Your local community wants stable jobs that don’t push people into hardship.
Paying a real living wage supports that trust in a practical way. Staff talk to friends, families, and other workers. Reviews often mention the “feel” of a place, and that’s shaped by how the team is treated behind the scenes.
There’s a B2B angle too. Some buyers ask questions about working conditions, because they don’t want reputational risk in their supply chain. You don’t need a glossy campaign to benefit from this. Being known as a decent employer can be enough to tip a decision your way.
You lower legal, operational, and reputational risks
When people feel underpaid, small issues can turn into formal complaints. That might be about hours, holiday, deductions, or overtime. Even if you’re trying to do the right thing, a stretched team is more likely to spot mistakes and push back, because they can’t afford a short pay packet.
Better pay often goes hand in hand with cleaner payroll habits. It encourages clearer contracts, better time records, and more consistent overtime control. It can also reduce pressure on staff to take on unsafe extra hours just to get by, which matters in care, warehouses, kitchens, and building sites.
Reputation risk is part of this too. A single angry post about poor pay and bad treatment can travel fast locally. Paying a real living wage won’t shield you from every criticism, but it reduces the chance of pay being the spark.
