Many in north of England on zero-hours contracts earn under £9 an hour, says IPPR

One in four workers in the north of England are paid less than the “real living wage” of £9 an hour, a study has found.

The rise of zero-hours contracts and a decade of stagnant wages has left 1.6 million northerners earning less than what they need to live, according to the thinktank IPPR North.

Women are most affected by what it describes as the “job quality crisis”, with one in three women paid less than the real living wage compared with one in five men.

The real living wage – £10.55 an hour in London, or £9 an hour across the UK – is a voluntary rate based on a calculation of what people need to earn to live, based on the price of household goods and services. It is higher than the statutory minimum wage of £7.70 an hour for under-25s, and the government’s national living wage of £8.21 an hour for over-25s.

The report, published on Wednesday, said real weekly pay had fallen by £21 since 2008 in the north of England, more than the national average. It said that although the number of people in employment had grown, the quality of many new jobs was often poor, pointing to the dramatic rise of zero-hours contracts from 190,000 in 2011 to 901,000 in 2017.

Marcus Johns, a researcher at IPPR North, who wrote the report, said: “People in the north are experiencing a job quality crisis. That one in four Northerners are paid less than the real living wage is nothing short of a scandal.

“Ten years of austerity has made it hard for local authorities to act. Of course government should increase funding to local government; but there are steps that local authorities can take to improve the quality of work, as some are already showing.”

The thinktank said the responsibility “lies principally with central government” and repeated its call for ministers to raise the minimum wage, strengthen employment rights and make changes to how UK companies are governed.

Johns said: “The next phase of the ‘northern powerhouse’ should prioritise economic justice. We need to build a north that works in the interests of all people and places, not just profit. The first step is for leaders across our region to work together to ensure that northerners have access to decent work.”

The report praised councils including Preston, Manchester, Warrington, Salford and Liverpool for taking steps to improve work locally but said such positive action was “far from mainstream”.

For example, it said that of the 326 local authorities in England (excluding parish councils) only 49 are accredited with the Living Wage Foundation, meaning they pay all directly employed staff a living wage and plan to extend that to subcontracted staff as well.

In the north of England, the report said, just eight local authorities and three combined authorities are accredited living wage employers, although others, such as Newcastle city council, pay a living wage but are not officially accredited.

The report urged northern leaders to set a target for every person in the north of England to earn at least the real living wage by 2025. It urged the north’s metro mayors – such as Ben Houchen in the Tees Valley and Andy Burnham in Greater Manchester – to establish an “employment charter” to encourage businesses and charities to make living wage commitments, improve pay and conditions and enhance worker representation through trade unions.