Low-wage work is the first step to a “poverty pay trap”, a leading union has warned, after new research showed how many people were being “priced out” of the economy.
A survey of more than 2,000 workers earning £6.50 an hour or less showed that a third cannot afford to shop where they work, and half did not know how much they would be paid from week to week.
The poll, for Unite, also revealed that most of those earning the minimum wage believed their employer could pay them more.
A fifth of young minimum wage workers said they had been forced to turn to food banks in the past year.
The report followed publication of official figures showing that average earnings increased by 0.3% in the past year, the lowest for five years.
Unite assistant general secretary Steve Turner said: “Government and business in this country are in danger of contriving a situation where hard work does not pay.
“Five million UK workers earn less than a living wage, consigned to an insecure income and increasingly shut out of the economy. Many of these workers are employed in the shops and services that populate our high streets, yet they cannot afford to shop where they work.
“The crying shame is that low wage work in this country is no longer the first rung on the employment ladder but actually the first step into a poverty pay trap. People with the skills for better-paid work are not escaping into it because there are no decent jobs around.
“Big business in Britain should hang its head in shame. Our major retailers, restaurant chains and hotels could well afford to raise wages, and with it the living standards of the communities they depend on for their profits.
“The message from this poll to government is clear, too. These workers are looking to you to act because too few boardrooms do. The minimum wage must be the living wage.”
Unite is fighting for the living wage – £8.80 in London and £7.65 elsewhere – to replace the adult minimum wage, which is currently £6.31 per hour.