One in five can't earn a living wage

One in five of the nation's workers, about 4.82 million people, receive less than the living wage, the rate of pay designed to enable workers to afford at least a ground-floor standard of living, new research showed today.

The rate is currently £8.30 an hour in London and £7.20 in the rest of the country, compared with the national minimum wage rate of £6.19 an hour.

But accountants KPMG have shown that the cuts-mad Con-Dems are hitting lower-paid workers the hardest.

It said that more than two in five revealed their finances are worse now than they were just one month ago - sparking outrage from unions.

Meantime, Minister without Portfolio Kenneth Clarke was reported as saying on the state of the economy: "It would be absolute folly to turn around and say it will all be fine by Christmas.

"Anybody who says we are absolutely certain we are bouncing back to strong growth is being very optimistic."

TUC general secretary designate Frances O'Grady said: "The living wage is not a luxury. Many more employers could afford to adopt the living wage and we hope that many more decide to pay it in the coming months."

A PCS spokesman said: "These statistics are a shocking indictment of government pay policy - the rush to a low pay economy.

"This policy is a disaster for individuals faced with rising food and energy bills this winter."

And a Unison spokeswoman said that in Tory Britain the gap between the people at the top and those at the bottom is growing.

"Scrooge bosses paying below the living wage are costing the taxpayers dear as people are forced to rely on in-work benefits just to make ends meet."

Unite's general secretary Len McCluskey said: "Living standards have been squeezed like never before and wages falling while the fat cats in the City still enjoy bumper bonuses.

"We are continuing to call for a £1 an hour increase in the minimum wage as a stepping stone to a full living wage.

"This would benefit 4.5 million low-paid workers, not costing the government a penny and putting money back into the economy."

Even bosses group CBI waded in to say that the government should renew efforts to help young people find work after a new study showed recruitment in private firms will remain "cautious."

Its chief policy director Katja Hall said: "Too many young people from disadvantaged backgrounds are not getting jobs because - as the survey shows - job creation at a skilled level requires skills and attitudes which we do not help them to develop."