One of the more cynical moves undertaken by George Osborne during his tenure at the Treasury—as opposed to the purely punitive—was his rebranding of the minimum wage for employees aged 25 and over into a so-called ‘National Living Wage’. Met in the Commons with frenetic gesticulations by Iain Duncan Smith, the cynicism of this move lay in the fact that the existence of the Living Wage predated Osborne’s co-option of the name. Its origins were in a campaign—indeed, an example of the kind of community organising Labour has recently decided it has no need for—that began in the mosques, churches, and schools of London in 2001 to push for a wage that ‘meets living costs, not just the government minimum’.

The Living Wage Foundation is the successor to that campaigning drive – and has, since 2011, calculated a Real Living Wage: the amount per hour an individual needs to be paid in order to get by. Unsurprisingly, this figure is higher than that mandated by the National Living Wage: in 2015, when Osborne first introduced his rebranded minimum wage, the Living Wage Foundation had to make clear that Osborne’s ‘living wage’ is not actually a living wage, noting that ‘The Living Wage is calculated according to the cost of living whereas the Low Pay Commission calculates a rate according to what the market can bear.’

Whilst the legally-mandated minimum wage today is £8.72 for those over 25—and even less for those younger—the Living Wage Foundation calculate that the amount an individual needs is considerably higher: £9.50 per hour; £10.85 in London. Alongside their campaigning work, the Living Wage Foundation also carries out research: in light of coronavirus, the organisation has recently released a stark report—‘Life on Low Pay in the Pandemic’—which paints a grim picture of the compounding impact of perpetual low pay and the coronavirus crisis on the lowest paid in society.

The Foundation surveyed over 2,000 employees who work full time but earn less than the Real Living Wage. More than two thirds of the people surveyed had seen decreases in their income; already earning less than the amount required to get by, the pandemic has had a deleterious impact on their financial security, health, happiness, and social relationships. The impact for many of those surveyed has been dire. 30 percent had fallen behind on bills; 20 percent had fallen behind on their rent or mortgage; and close to 15 percent has been forced to take out a pay-day loan.

Over 1 in 4—equating to a million people—had regularly skipped meals for financial reasons, whilst 1 in 5 had been unable to heat their homes. Close to 50 percent said their level of pay affected their levels of anxiety and negatively affected their quality of life, whilst a further 31 percent said the pay they received negatively affected their relationship with their children.

These trends are no doubt depressingly widespread across the UK economy: 5.5 million jobs in the UK pay less than the Real Living Wage; this equates to 20 percent of all jobs in the labour market. As Laura Gardiner, Director of the Living Wage Foundation, rightly told me: ‘We’ve long known that low pay leads to financial insecurity, but our analysis shows the much broader and more pernicious effects of low wages on workers and their families. The fact that many low earners—including essential workers who’ve kept the economy going through the pandemic—are forced to skip meals or forego heating their homes is unacceptable.’

Whilst it is, of course, encouraging news that 1,200 businesses have committed to paying the Living Wage since the start of the pandemic, we cannot rely on the enlightened self-interest of firms to ensure those at the bottom of the income distribution receive enough to get by.

Taking a step back, this entire situation speaks to the dysfunctionality of the contemporary British state: that the Conservative Party could introduce a ‘living wage’ which demonstrably and quantifiably is no such thing – safe in the knowledge this would be met with applause and knowing asides that they were ‘parking their tanks on Labour’s lawn’; that repeated demonstrations of the deep, entrenched levels of poverty in the UK can seemingly be defused by a figurative ruffle of the Prime Minister’s hair.

For far too many workers, the UK economy is defined by low pay. As The Living Wage Foundation’s report shows, the consequences of this are widespread and deleterious, predating the onset of the pandemic, brutally exacerbated by its uneven impact. To address this, we need to address the root cause: low pay is a consequence of low worker power. As a recent report from the European Trade Union Confederation has shown, the countries in the EU with the lowest levels of collective bargaining have the lowest wages.

Indeed, the UK, perhaps unsurprisingly, has some of the lowest rates of collective bargaining across both European economies, and across the wider OECD. It has also, crucially, seen some of the most precipitous collapses in union density and collective bargaining coverage: 70 percent of wages were set by collective bargaining in 1980; today, it is closer to 25 percent. The enduring influence of Thatcherism has recalibrated the UK economy’s industrial relations into an outlier amongst European economies – closer to the transition economies than to France, the Netherlands, or Austria, let alone the Nordic nations.

The consequences of low pay, so comprehensively documented in the Living Wage Foundation’s recent report, are profound. The solutions to this lie not in technocratic fixes—as research shows, ‘wage systems based on collective bargaining have a lower number of people earning the lowest wages compared to the statutory minimum wage system’—nor in a reliance on the noblesse oblige of business, but in revitalising the institutions, and rebuilding the power, of organised labour. This is no easy task: but a sober analysis of how far the UK has fallen should not be a distraction from, but rather a precondition of, recognising what needs to be done.