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Low pay in London

By Aaron Barbour

GLAEconomics Report CoverThe Greater London Assembly’s economics unit report no.22: Patterns of low pay in London’  highlights (yet again) the numbers of people and the conditions that keep many in poverty.

Between 15-19% of London’s workforce is low paid (earning less than £7.05 an hour), that’s between 481,000 and 609,267 working poor. Low pay more frequently affects employees who are less well-qualified, young, and and from black and minority ethnic communities.

As our Informal Economy work has shown, work should not keep people in poverty, but help to raise them out of it.  More of a focus by employers and the government (even in this difficult economic time) should be aimed at ‘making work pay’. A popular slogan bandied about that the DWP in its green paper ‘No one written off’ should consider further. 

The other consideration to reduce these levels of low pay is that of enforcement, particularly of the National Minimum Wage, however current levels of enforcement are comparable to the Dickensian era.

Of particular note in the GLA report is the figure that 199,400 (7.2%) of London’s workforce are earning less than £5.05, with most of them young people. Why is there a difference in the rate of the NMW for people over a certain age? Our report ‘Cash-in-hand and working rights for young people’  (see previous blog entry) made the recommendation that the NMW should be the same regardless of age. This would help to reduce wage inequality and help to progress more people in the labour market currently in low pay.

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