London’s lowest paid employees have seen their wages increase by an average of 5% to 7% compared with two years ago, according to a new analysis of official figures.
The increases, which have helped the bottom 20% of earners in the capital, are attributed by researchers from Trust for London and New Policy Institute partly to an increase in the government’s statutory National Living Wage rate for over-25s, introduced last year, from £7.20 an hour in 2016 to £7.50 in April 2017.
However, the wage growth was least pronounced among the bottom 10% and the overall incidence of low pay in London, defined as an hourly rate lower than the current voluntary £9.75 London Living Wage, remains at 21%, representing only a 1.5% decrease since 2015. The current total number of low paid employees in London is put at 690,000, the same as in 2016.
The earnings growth at the bottom end of the pay scale was the strongest within London as a whole, with that of the highest paid 10% seeing their earnings grow by only 3.4%. This, though, was high compared with other groups in London and considerably greater than the 1.4% increase for the highest paid across England as a whole.
The researchers, whose figures are based on the latest national annual survey of hours and earnings, found the prevalence of low pay in Outer London boroughs to be double that in Inner London boroughs – a 30% rate compared with 14%. The Outer London rate represented an increase since last year.
Mubin Haq, director of policy and grants at Trust for London, said that the effect of the National Living Wage on the lowest paid was welcome but not enough to “shift the numbers of Londoners who are low paid” which “remains persistently high”.
The new rate for the London Living Wage is to be announced next week. Trust for London funded a report for the Centre for London think tank, published in 2013, making the case for a statutory London minimum wage.