One in five workers in the UK are paid less than the living wage, research from accountancy firm KPMG shows.
The living wage is measured according to what workers need to afford a basic standard of living.
Mark Constantine, founder of the Lush cosmetic chain, explained that the Living Wage is a "reasonable" way of looking at how fair wages are.
Describing how he was persuaded to introduce the living wage, he said "I got cornered at a Christmas party" and he was asked whether he "purposely exploited" his staff.
Mike Cherry, national policy chairman of the Federation of Small Businesses said that "it makes sense if you can afford it" for employers to pay a fair wage to employees.
However he cautioned that it is not possible for those sectors who struggle to pay the minimum wage.
The living wage is currently £8.30 an hour in London and £7.20 outside and this compares to the national minimum wage rate of £6.19 an hour.
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