Over 750,000 jobs pay less than the living wage in the capital

Bike work-2Nearly 1 in 5 jobs in London pays less than the living wage and in some areas of the capital between 30 and 40% of work has an hourly rate below the level Londoners need to live on.

The proportion of jobs below living wage has risen from 13% in 2008 to 19% last year, with women affected more than men and under 24s particularly hit.

Data from the Office for National Statistics show that in 2014 more than three quarters of a million jobs in London paid less than the living wage. Part time jobs are affected more than full time employment, 4 times more likely to be below the living wage.

The London Living Wage (LLW) is set by the Greater London Authority. It is a voluntary rate and promoted by the Mayor, who is trying to get employers to sign up. It is currently set at £9.15 per hour. Last year during the period for these job statistics it was £8.80.

The concept of the LLW was introduced in 2008 and followed by an Out of London rate in 2012. From 2008 to 2010 the proportion of jobs in London below the rate was stable at around 13%. In the past 5 years there has been a growth in low pay, low skill jobs but wage stagnation during the economic downturn of 2008/09 has meant that earnings are lagging behind.

Living Wage rate

The data shows that some sectors of the jobs market that are growing fast have a very high proportion of jobs below the living wage – 45% of social care jobs, 55% in retail, 65% in food and accommodation, and 78% of cleaning jobs.

It is not only work for private companies that is paying poorly. 6% of jobs in the public sector also pay below living wage level. That’s 51,000 jobs.

The only legal protection on pay is the National Minimum Wage, currently set at £6.50 per hour for those over 21. In the budget in July the government announced a new legal rate for over 25s, rather confusingly calling it the National Living Wage. This will be introduced in April at £7.20, but it will not get to the current level of the London Living Wage until 2020.

And it will offer no help to those under 24. Nearly half the jobs in this age group pay less than the living wage.

living wage age

Since 2008 the proportion of 18-24s paid below living wage has gone up by 11% and the rate of 25-34s has risen by 7%.

Women are more likely than men to have jobs below living wage – 22% compared to 16% of men.

London’s rate of 19% of all jobs paying below living wage makes it one of the lowest levels in the UK, on a par with the South East of England and Scotland. But it is not a uniform picture across the capital. 5 boroughs, Harrow, Waltham Forest, Enfield, Sutton and Newham, have rates at 30% and above.

Living wage map-2

Harrow has the second highest proportion of jobs that pay below living wage in the UK. Waltham Forest has the 7th rate.

While parts of the capital enjoy a high proportion of jobs paying above the living wage, tens of thousands of Londoners in the outer boroughs will continue to struggle with the cost of living in the city.

Source data

See also

Living Wage helps some but thousands struggling with low pay in London

Paying the rent takes up 72% of income for private tenants

Pay rates underline gap between rich and poor boroughs