THERE are 4.8 million workers earning below the so-called living wage, according to new research from the Resolution Foundation.

The figure, equivalent to 20% of employees, is up from 3.4 million in 2009.

The living wage is set at £7.45 outside London and £8.55 in the capital.

Although employers are legally required to pay the minimum wage, this is not the case with the living wage.

The Resolution Foundation said that it had used the most recent figures available, when the benchmark was calculated as £7.20 an hour outside London and £8.30 in the capital.

It found that 25% of women and 15% of men were paid below the living wage in 2012 – up from 18% and 11% in 2009.

The think tank also found that 77% of employees aged under 20, and two-thirds of restaurant and hotel workers, earned less than the living wage.

Report author and economist Matthew Whittaker said: ‘For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.

‘Britain has a sorry story to tell on low pay. Only a handful of our close competitors do worse and the large majority have much lower rates of low pay – sometimes half as much.’

In a speech on Tuesday, Labour shadow Treasury minister Rachel Reeves said research by the House of Commons library suggested 60% of new jobs created since May 2010 had been in low-pay sectors, where median hourly pay was less than a quarter of the national hourly median.

She accused ministers of presiding over an ‘economy that, for far too many people, seems only to offer work that is insecure, poorly paid and – in the worst cases – simply exploitative’.

• Wages in the South West have fallen by 5% since 2007, with men losing £32.28 a week, and women losing £19.96, according to TUC research.

The figures show that in 2007 the average hourly pay in the region, in 2012 prices, was £11.32. That has now fallen to £10.67. The figure drops from £13.07 to £11.98 for men, and from £9.90 to £9.67 for women.

Nigel Costley, regional secretary of the South West TUC, said: ‘Across the South West families are still really struggling to make their money go far enough – and are often having to go into debt – as they experience a huge squeeze on their household incomes.’