Sheffield is the city that will benefit the most thanks to the government’s National Living Wage, which comes into force today.
Around 28 per cent of the city’s workforce will get a pay boost by 2020 – more than any other large city in the UK.
The city’s lowest paid workers aged 25 and over could be entitled to a rise of as much as a 50 pence an hour.
The minimum wage is £6.70 an hour – but from today, workers aged 25 and over will be paid at least £7.20 rising to £9 an hour by 2020.
Employees on the minimum wage working 40 hours a week could earn an extra £960 a year.
The Resolution Foundation says Sheffield is the city with the highest proportion of people on low incomes.
Adam Corlett, an economic analyst at the Foundation, said: “Workers in Sheffield are most likely to receive a pay rise as a result of the National Living Wage, with 28 per cent of employees expected to gain in total.
“This is twice the proportion in London where 14 per cent will benefit.
“Sheffield, as well as having fewer workers in high paying sectors, has the largest proportion of employees in wholesale and retail, which helps explain its higher prevalence of low pay and the challenges the NLW will pose there.
“In most of these city regions, including Sheffield, additional sums of over £100 million will be flowing to lower paid workers due to the NLW.”
But Heeley MP Louise Haigh said: “For too many people in our city, low pay is a reality. While any pay rise is welcome let’s not pretend low-paid workers in Sheffield will be earning enough to live on come April.
“They will still earn £1,400 per year below the salary which the respected Living Wage foundation say is needed for an acceptable standard of living.
“As for under 25s who will not receive the rise at all, the Tories have been quite clear. One Tory Minister said they don’t deserve a pay rise because they are ‘unproductive’ – that is an insult to the millions of young workers who can often do exactly the same job as their older colleagues but who in April will find they are paid far less. In Sheffield, with one of the youngest populations in the country, the Government’s decision will feel personal.”
Hallam MP Nick Clegg said: “Raising the minimum wage and calling it a living wage is not the same as giving workers a real living wage.
“New cuts to Universal Credit by the Conservative government mean working families will lose on average £1,600 a year. The unfortunate reality is that the ‘living wage’ is the government’s way of justifying billions of pounds worth of welfare cuts to the most vulnerable.
“I’m in no doubt even with a wage rise, many workers in Sheffield will still feel they have been short changed.”
Around 20 per cent of Sheffield’s workforce are employed in retail with 15 per cent working in health and social work. Both usually low paid.
The actual ‘Living Wage’ is set at £8.25 with the exception of London where it stands at £9.40.
This is not set by law and is applied by firms on a voluntary basis which include Aviva, Nationwide and Nestle.