The number of workers earning less than a living wage is a "national scandal" and the Government should aim to move at least one million of them out of poverty, according to a report.
A year-long study from the Living Wage Commission urged the Government to implement a series of "low cost" measures, such as higher tax revenues and reduced in-work benefits.
Commission chair, the Archbishop of York John Sentamu, said the measures would help raise the salaries of half a million public sector workers.
Professional service firms such as accountancy, banks and construction companies could boost the pay of 375,000 workers if they agreed to pay the Living Wage, currently set at £8.80 an hour in London and £7.65 elsewhere, compared to the national minimum wage of £6.31, said the report.
The commission, made up of business, union and voluntary sector leaders, warned a failure to extend the Living Wage would mean families continuing to rely on food banks and "unsustainable debt" to get by.
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