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Low Pay

Key points

  • In 2013, 640,000 jobs in London were low paid (paid less than the London Living Wage of £8.80 per hour). In 2007 420,000 jobs were low paid (when the London Living Wage was £7.25 per hour).
  • The percentage of jobs paid less than the London Living Wage was around 13% between 2005 and 2010, but by 2013 it reached 18%. This reflects a trend seen across the earnings distribution: the cost of living is growing faster than earnings, so as prices increase more jobs fall below the low pay threshold.

We measure low pay in this report using the London Living Wage as set by the Greater London Authority. This is an hourly rate of pay that takes into account the costs of living in London and 60% of the median wage. It is designed to provide someone and their family with enough income for essentials and a cushion against unforeseen events. In 2013, it was £8.80 per hour, up from £6.70 when it was introduced in 2005 (its rise has largely been in-line with national measures of inflation). This compares to the level at £7.65 for the national Living Wage and the national minimum wage at £6.50. The Living Wage differs from the minimum wage as employers are not obliged to pay the former.

Indicator last updated: 14 August 2014

Case Study

Case study: Kenan

Kenan is a Turkish man, aged 49, and has lived in London since 2000. Following a three-year prison sentence for his political activity and constant police harassment, he left Turkey and claimed asylum in the UK but was refused. My...More…

Glossary

London living wage:

The London living wage is based on a calculated 'poverty threshold wage', but with an additional 15% added to ensure a 'decent' standard of living for the recipient. More on the living wage campaign.

Low pay:

The threshold for low pay used by this website is the London living wage.

Income poverty:

A household is considered to be in income poverty (or low income) if its income is less than 60% of median household income. This measure is used by the Government in its child poverty target and is in common usage across the European Union.

In-work tax credits:

Child and Working Tax credits (CTC and WTC)

CTC is a means-tested payment for people with dependent children, whether in or out of work. However, this analysis only uses the part payable to families in-work.

WTC is a means-tested payment for working people on a low income

Adapted from http://www.taxcredits.inlandrevenue.gov.uk

Outer London:

Barking & Dagenham, Barnet, Bromley, Bexley, Brent, Croydon, Ealing, Enfield, Greenwich, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Merton, Redbridge, Richmond upon Thames, Sutton, Waltham Forest

Inner London:

Camden, Hackney, Hammersmith & Fulham, Haringey, Islington, Kensington & Chelsea, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets, Wandsworth, Westminster

Read all glossary definitions