Ikea United Kingdom to introduce the living wage

In his first post-election budget, British finance minister George Osborne announced a compulsory living wage for workers aged over 25, starting at 7.20 pounds ($11.24) an hour when it is introduced next April and rising to 9.35 pounds by 2020.

Home furnishings retailer Ikea is set to pay its entire United Kingdom staff more than the national living wage when the new rate of pay comes into operation next year. In London, Ikea will pay a Living Wage of £9.15. These are the rates set by the Living Wage Foundation.

The national minimum wage for over 21s is £6.50 per hour, with 18 to 20-year-olds paid £5.13 hourly. He said: “Without a change of remit for the Low Pay Commission this is effectively a higher national minimum wage and not a living wage”.

It will directly affect about half of its 9,000 United Kingdom employees, the BBC reports.

Matt Davis, director of communications at responsible investment charity ShareAction, told IBTimes United Kingdom in June: “Our view is that raising these issues at the AGMs of these companies, we have an opportunity to have the dialogue directly with the people who make the decision, so it is a David and Goliath setting”.

Gillian Drakeford, IKEA United Kingdom and Ireland country manager, said: “As a values-driven organisation, we are guided by our vision to create a better everyday life for the many people, which of course includes our co-workers”.

The Living Wage Foundation has accredited more than 1,600 businesses, including well-known companies such as Nestle, Nationwide and British Gas.

The government plans to introduce an increased employment allowance to soften the impact of the New Living Wage on employers, but the ACS said this would provide comparatively “small compensation” for convenience stores.