Almost 600,000 Londoners stuck in low pay

Almost 600,000 Londoners, equivalent to one in seven employees, have been stuck in low pay for at least a year, according to research commissioned by Trust for London and carried out by the Centre for Economic and Social Inclusion (CESI).

Its Work in progress report, which surveyed more than 100 employment and skills providers, found that a third of low-paid employees have seen their wages increase by less than the national average in the last year.

The research also found:

  • There are 14 occupations in London where a majority of staff are paid below the Living Wage, which is currently set at £7.45 an hour in London. These include sales staff, bar staff, waiters and labourers.
  • All but two of these occupations have seen below-average pay growth over the last five years.
  • At the same time, employment in low-paying occupations has grown, in some cases by more than a third.
  • Low-paid young Londoners are more than twice as likely to see below-average pay rises than low-paid young people in the UK as a whole.
  • Low-paid workers receiving training on the job have seen their pay increase by 13% on average, compared to those that do not (8%)

Tony Wilson, director of policy at the Centre for Economic and Social Inclusion, said: “We spend £2.9 billion a year on mainstream employment and skills support nationwide, yet virtually none of this is used to support people in low-paid work to increase their earnings. 

“This is despite falls in real wages, a growth in insecure work and record levels of working poverty.

“Much of this funding could be unlocked straight away, by allowing skills providers to use their budgets to support workers most at risk of being stuck in low pay. 

“But we also need longer-term testing and reform, with an ‘employment plus’ approach that supports people to find work, stay in work and progress in work.”

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Mubin Haq, director of policy and grants at the Trust for London, added: “This research demonstrates the scale of the challenge on low pay and living standards, both in London and the UK. 

“Encouraging employers to pay the London Living Wage must be central to addressing this. However, this research shows we also need to do much more to support low-paid people to progress in work, and sets out the steps we need to take.”