Low Pay in the Third Sector Not Improved in Five Years and Could Get Worse Due to Covid-19 

New research shows low pay continues to be an issue in the UK’s third sector and is a particular issue for women, disabled workers, those from racialised groups and part time workers. 

A fifth (17%) of workers in the third sector earn below the Living Wage, amounting to 388,000 workers. In Scotland, the figure is higher – with 18.4% of workers in the third sector paid below the Living Wage.   

Across the UK, the rate of low pay in the sector is the same as it was five years ago, despite low pay in the public and private sectors’ decreasing, according to new research from the Living Wage Foundation.  

Low paid third sector workers are also more likely to have lost work through the pandemic, with half (48%) of low paid third sector workers being ‘away from work’ (mainly due to Furlough) during the height of the pandemic (Q2 2020), compared to just 20% of those earning at or above the Living Wage.  

The sector is still coming to terms with the financial impact of the pandemic, with two thirds (63%) of third sector organisations reporting increased demand over during Covid-19, and 83% projecting a decline in income, meaning things could get worse before they get better for low paid workers.   

The research showed certain third sector workers faced a greater risk of earning less than the real Living Wage (£9.50 outside of London and £10.85 within London). For example, in the UK: 

  • 19% of women are paid below the Living Wage, compared to 13% of men.  
  • 20% of workers from racialised groups are paid below the Living Wage, compared to 17% of white workers.  
  • 29% of part time workers earn below the Living Wage, compared to 9% of full-time workers.  
  • 20% of disabled workers earn below the Living Wage, compared to 15% of those without a disability.  

Graham Griffiths, Interim Director of the Living Wage Foundation, said: 

“During Covid-19, the third sector has been a lifeline for millions of families across the country, providing them with everyday needs like food, clothes and educational equipment. Our research shows that many of these workers have been providing these services despite earning below the Living Wage and being unable to afford them themselves.” 

“After more than a year of pandemic firefighting, the third sector has some time to think about how it rebuilds through and beyond Covid-19. To continue to provide essential services year-round and attract new people into the sector, providing workers with a real Living Wage must be at the heart of this process. “ 

“We urge third sector organisations who can do so to become Living Wage employers, and for funding providers to become Living Wage Funders to help spread and support the growth of Living Wage jobs in the sector”.  

Peter Kelly, Director of the Poverty Alliance said: 

“Too many workers in Scotland, including those in the third sector, are living in the grip of low-pay. The Scottish Government have announced a commitment to require all recipients of public sector grants to pay at least the real Living Wage by the summer of 2022. While this is a step towards creating a more just sector, the government and all grant funders have a vital role to play in enabling employers to pay their workers the real Living Wage. By becoming an accredited Living Wage employer, our community and the voluntary sector can help to ensure everyone in Scotland has enough to get by.” 

 Read the Living Wage Foundation’s research briefing here.

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