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20 October 2018
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Business sees the upsides to Living Wage © iStock

6 November 2017 | Herpreet Kaur Grewal

The Mayor of London, Sadiq Khan, has announced a landmark increase in the London Living Wage today, from £9.75 to £10.20 an hour – a 4.6 per cent rise and the first time the wage has been more than £10.


He also revealed that another 470 employers had signed up to pay their staff the capital’s hourly rate over the last 12 months, bringing the total number of accredited businesses in London to 1,502.


As a result, London now accounts for almost 42 per cent of businesses paying the Living Wage in the UK.


During Khan’s mayoralty, the number of businesses paying the London Living Wage has increased by 50 per cent. Over the past year major companies and organisations including Lush, the National Gallery, Somerset House, the Southbank Centre, UBS and Societe Generale have become accredited as London Living Wage employers.


But the Mayor is calling for more businesses to sign up to pay the London Living Wage to help tackle in-work poverty and the ethnic pay gap in London.


Nearly 60 per cent of Londoners living in poverty are in working households, compared with less than a third of Londoners 20 years ago.


The ethnic pay gap remains unacceptably high, with the median wage for white groups at £16.23 an hour compared with £13.46 an hour for all black, Asian, and minority ethnic (BAME) groups. Moreover, double the number of Bangladeshi and Pakistani workers are paid less than the London Living Wage compared with white British employees.


Next year the mayor will be launching his Good Work Standard which, with fair pay and the London Living Wage at its heart, will support employers to adopt best practice and achieve high standards in areas of such as workplace diversity, flexible working, health and well-being, skills development and ensuring that employees’ voices are heard.


He will work with major employers from all sectors, especially those with high standards, to support businesses and other employers who would like to develop them.


Khan said: “I am determined to make London a fairer and more equal city, and the news that more 1,500 businesses are paying the wage is a good step towards achieving that. But we need to go further – and for many more businesses and organisations to sign up.


“London is one of the most dynamic and prosperous economies in the world, but unfortunately this prosperity isn’t shared by all Londoners. In the capital today, more than two million people are struggling to make ends meet and the ethnic pay gap is shockingly and unacceptably large.


“ I want to make sure that no one who goes to work every day should have to endure the indignity of poverty.


“Paying the London Living Wage is not only the action of a responsible organisation, but a successful one too. Many of the accredited employers I speak to tell me of the increased productivity and reduced staff turnover that they’ve experienced since signing up.”


The Living Wage Foundation is responsible for calculating the wage rate through the Living Wage Commission. The calculation, based on a basket of goods used to measure the cost of a decent standard of living, gives the wage rate needed for a worker in London to provide their families with the essentials of life plus a cushion against unforeseen events.


Katherine Chapman director of the Living Wage Foundation, said: “The new Living Wage rates announced today will bring relief for thousands of UK workers being squeezed by stagnant wages and rising inflation. It’s thanks to the leadership of over 3,600 employers across the UK who are committed to paying all their staff, including cleaners and security staff, a real Living Wage.


“In-work poverty is today’s story. New figures out yesterday show that 5.5 million people are still paid less than the real Living Wage – it’s fantastic that this year alone over a thousand more employers have chosen to go beyond the legal minimum and pay a real Living Wage, putting fairness and respect at the heart of their business.


“Great businesses know that, even during these tough times, not only is fair pay the right thing to do, but paying the real Living Wage brings big benefits. Nine out of 10 accredited Living Wage employers report real benefits including improved retention, reputation, recruitment and staff motivation.”


Responding to the London Living Wage increase, Megan Dobney, from the Trades Union Congress London region, said: “The increase in the London Living Wage will be welcomed by the tens of thousands of workers who benefit from it. Far too many families in London are living in poverty because of the enduring curse of low-paid work.


“If London is truly to be a world-class city then it must be a world-class place for all who work here, and that means fair pay for all workers.


“We support Sadiq Khan’s promise to ‘tackle low pay and to make London the best place in the world to work’. The London Living Wage is a growing success and our challenge is to get more employers to understand the benefits it brings to their businesses.”