Why a Real Living Wage could improve tenants’ lives

It is worth remembering that, during Living Wage Week, and one week on from the Budget, one of former Chancellor George Osborne’s more devious political plays was to rebadge the national minimum wage for over 25-year-olds as the national living wage.

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Of course, it was nothing of the kind. And despite an inflation busting increase of 4.9% in the Budget, the NLW remains significantly below the Real Living Wage.

Also, unlike the RLW, the NLW does not include under 25s, hasn’t a London weighting, and is not based on independent calculations of living costs.

A RLW is both popular with social tenants and, if introduced, would make a major difference to the finances of working tenants.

In surveys of social tenants by the Human City Institute, 38% choose a RLW as a major way to improve their financial position out of 10 potential national initiatives. The introduction of a RLW was second only to tenants selecting ‘increased benefits’ in our surveys.

The current financial position of social tenants explains these results.

Over three quarters of tenants have incomes in the bottom two quintiles nationally, and 45% are located in the bottom fifth of incomes. The average income of social tenants is just half that of home owners.

Some 50% of social renters are classified as living in ‘urban diversity’ by the English Housing Survey 2016/17, while a further 37% are judged to be ‘financially stretched’. HCI’s research points to one in three social tenants living in the 10% most deprived neighbourhoods in England.

Just over 43% of social tenants are in work, with 13% being in part-time and/or zero hours contract work. Almost six in 10 employed tenants are in routine or semi-routine work, which is much higher than other tenures.

Tenants have also seen their incomes decrease substantially since 2010, taking to account further benefit and tax changes to come by 2020, with the majority losing between 10% and 6% of their already low incomes.

So, social tenants experience considerable financial exclusion that could be ameliorated by a range of measures, including the introduction of a RLW.

Social landlords are playing their part in promoting the RLW too. Around 130 social landlords are registered as RLW employers with the Living Wage Foundation. This represents about 3% of 4,700 RLW employers and about one-third of all major social landlords.

As everyone recognises, the social housing sector has been where the majority of Theresa May’s ‘burning injustices’ have played out since austerity was introduced eight years ago.

Without initiatives like the RLW, it is difficult to see how these injustices will ever be eradicated.

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