Ikea will become first national retailer to pay above new living wage

Ikea is to become the first retailer in the United Kingdom to pay more than the new National Living Wage introduced by the Chancellor George Osborne. This will compel all employers to pay staff £7.20 an hour from next April, rising to more than £9 by 2020.

The Swedish furniture company IKEA has promised to introduce the Living Wage for all its United Kingdom employees by April next year. The government has relied upon data which suggests such a rise will not have significant adverse effect upon jobs.

ACS chief executive James Lowman said: “We have always supported a national minimum wage, but the move to a higher compulsory national living wage will have a devastating impact on our sector”.

Rhys Moore, Director of The Living Wage Foundation, said this was a historic moment for the Living Wage movement, which states £7.85 as the hourly rate of pay that now covers the cost of living.

Known for its self-assembly items, Ikea employs more than 9,000 staff in the United Kingdom, including hundreds at the mega store in Bristol.

The current minimum wage is £6.50 an hour for people aged 21 and over.

Other United Kingdom retail giants have hinted they could follow suit on the living wage – Tesco boss Dave Lewis told campaigners in June that it was in talks about restructuring pay packages to increase basic salary, but has not made any promises. “This is a long-term investment in our people based on our values and our belief that a team with good compensation and working conditions is in a position to provide a great experience to our customers”.

The introduction of the Living Wage is part of a wider transformation IKEA is making to basic co-worker conditions as it looks to ensure that co-workers not only have the right level of pay but also a schedule that works for both them, as well as the business and customers, and the right contract.