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Investor engagement has won workers a pay rise. But now is not the time to drop the ball.

When we started working on the real Living Wage just two FTSE100 companies had accredited to pay it. Last month, this number hit 50 - but we can’t stop now.

By Rachel Hargreaves, Senior Project Officer - Good Work, ShareAction

The real Living Wage now sits at £9.90 – or £11.05 if you live in London.

This is what the average person needs to live: to meet all their essential needs and leave enough to spare for unexpected emergencies.

Inflation is spiking. This rise in the cost of living is being felt by the lowest paid most.

To address this, the government is raising its National Living Wage from April to £9.50. This is a positive move for low-paid workers. But there is still a large gap between this and the actual cost of living.

For a full-time earner in London, the difference between the government’s Living Wage and the real Living Wage – as calculated by the Living Wage Foundation – is £3,022 a year.

In the last eight years, we’ve seen a huge move towards companies moving to pay a real Living Wage.

When we started working on this issue just two FTSE100 companies had accredited to do so.

Last month, this number hit 50!

But we can’t stop now. It’s time for all employers to accredit as Living Wage employers.

50 FTSE100 companies is an important milestone, but investor pressure can’t slow down now

We are excited to see 50 of the FTSE100 now accrediting with the Living Wage foundation.

Investor engagement has played a key role in reaching this milestone. They have put the Living Wage on companies' agendas and ensured it stays there!

New accreditations have included large housebuilders Persimmon, Taylor Wimpey and Vistry Group (FTSE250).

This is exciting. These companies have had to overcome key challenges for the sector. This includes engaging with large, multi-tiered supply chains of sub-contractors to ensure all workers on their sites receives the real Living Wage.

They can be an example to other complex organisations of what's possible.

Like many other companies, these housebuilders have seen that paying a real Living Wage isn’t just good for workers, but for their business too.

As a site Manager for Persimmon said,“since introducing the real Living Wage ‘staff morale has increased’ and ‘staff retention has also increased’”.

There is still a long way to go to ensure all workers can meet the cost of living

These companies have shown leadership. They’ve shown that it's possible to implement a real Living Wage in the sector and throughout their supply chains.

Some of their peers, including the likes of Balfour Beatty and Berkeley Group, are still lacking behind, and are yet to make the same commitment to their staff.

And they aren’t the only ones.

It’s great that half of the largest companies in the UK are paying their staff a wage that meets the cost of living - but it also means half of the largest companies in the UK are not!

In fact, one in six workers in the UK continue to earn below the real Living Wage.

And of course, some groups are more likely to be in low paid work than others.

Around 20 per cent of women are paid less than the real Living Wage compared to around 14 per cent of men. Workers from racialised groups (19 per cent) are more likely to earn below the real Living Wage than white workers (16 per cent).

In some sectors there continues to be little movement. No large UK supermarket, for example, has accredited with the Living Wage foundation.

All investors should step up and engage with investee companies on the real Living Wage.

We’ve seen how impactful investor engagement can be, but it’s clear there is still more work to do.

Having 50 of the largest companies accredit with the Living Wage foundation is a huge win for the investors engaging on this topic.

With a backdrop of rising living costs, now is the time for all investors to redouble their efforts and turn their attention to those companies that are yet to join them.

Last week Legal and General Investment Management, the UK’s largest asset manager announced that they will increase their focus on engagement regarding the pay for employees including advocating for the Living Wage, over engagement on executive pay.

We are calling on all investors to join them and engage on this important topic by joining ShareAction’s Good Work investor coalition.

Read Investing in the Living Wage: A toolkit for responsible investors.

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