Figures show living wage impact

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NEW figures show the national living wage will have dramatically different impacts for staff and employers across the region when it comes into force next month.

In some areas more than a quarter of workers will see a rise in their wages in April while in other parts of Yorkshire it will be fewer than one in five.

Richmondshire will see the biggest impact, with the Resolution Foundation thinktank estimating 28 per cent will enjoy a pay rise when the new law comes into force.

Kirklees, Harrogate and East Riding will also be among areas where more than a quarter of workers benefit.

But in Leeds, York, Calderdale and Sheffield, fewer than one-in-five workers will be better off.

The national living wage comes into force on Friday and will mean employers have to pay workers aged 25 and over at least £7.20 per hour.

The existing minimum wage rules will remain in force for younger workers.

The Resolution Foundation argues the large number of people seeing no benefit from the change in the law underlines the need for employers to continue to sign up to the voluntary living wage set by the Living Wage Foundation.

The Living Wage Foundation recommends employers outside London should pay £8.25 per hour.

It is also urging councils and elected mayors due to take office next year to prioritise working with businesses to ensure they can deliver the national living wage.

Resolution Foundation director Torsten Bell said: “The National Living Wage will transform Yorkshire’s low pay landscape.‎ Richmondshire will be one of the most affected areas in Britain, with almost three in ten employees aged 25 and over set for a pay rise.

“In contrast, fewer than one in six workers in Leeds will be see their pay increase. This shows why we still need to see more employers sign up to pay the higher voluntary Living Wage.

“Of course pay rises don’t come for free, so employers in some parts of Yorkshire will feel the pressure more than others.

“That’s why making the national living wage a success should be a priority for local and newly elected city leaders across the region.”

The introduction of the national living wage, which was announced last year by Chancellor George Osborne, has been criticised in some quarters for being little more than a rebranding of the national minimum wage while others have warned it will put pressure on businesses when economic growth remains fragile.

Concerns have also been expressed about the impact on public sector employers at a time of cuts in Government funding.

Many councils across Yorkshire already pay their own employees the salary recommended by the Living Wage Foundation but will see significant increases in their costs as contractors increase wages, particulary those providing care to the elderly.

The Local Government Association has estimated the higher wage will add more than £300m to the cost of elderly care contracts in the coming year.

The Government has set out an ambition to make the national living wage worth 60 per cent of the average wage by 2020, a figure likely to be around £9 an hour.

However, achieving that increase depends on there being “sustained economic growth” and the Government will set annual rises following advice from the Low Pay Commission which will take unemployments levels into account.