The proportion of full-time, part-time and all jobs that are paid below the LLW over time and are held by Londoners. This graph assesses whether people are low paid or not based on their hourly earnings. Some workers may be paid above the LLW but because they are not working full-time hours, or have low weekly earnings. The LLW has been calculated for full-time workers* and there is no equivalent number that weekly earnings can be measured against.
In 2016, just over one in five employees (21%) were low paid. This was a decrease of 1 percentage point since 2015 when it was 22%. This was the first time since 2005 – when the low pay rate was 13% – that there was a decrease in the proportion of people who are low paid. The number of low-paid jobs in London in 2016 was 680,000, a decrease of 19,000 since 2015 and the first drop since 2009.
This change is being driven by a decrease in the proportion of part-time jobs that were low paid. In 2016, the low pay rate for part-time jobs was 46%, which is equivalent to 340,000 jobs, 3 percentage** points lower than in 2015 when half of all part-time jobs were low paid (50%, or 360,000). The impact on the overall rate of lowpaid jobs was smaller than this because part-time jobs only account for 23% of all jobs. Up until 2009 about a third (35%) of part-time jobs were low paid, this increased rapidly until 2015. The decrease between 2015 and 2016 has not been enough to reverse this rise completely.
The proportion of full-time jobs that are low paid remained the same in 2016 at 13% (315,000 jobs) as in 2015. The proportion of low-paid full-time employees was fairly constant between 2004 and 2011 (fluctuating between 7% and 8%). Between 2011 and 2012 the rate increased by 3 percentage points to 11% and continued to increase – at a slower rate – until 2015. The rate has not begun to fall yet so the rate has remained higher than in the 2000s.
An alternative measure of low pay is to compare hourly pay to two-thirds of the median. This represents a more ‘relative’ measure of low pay. On this measure low pay is much more consistent: between 17% and 18% for full-time employees since 2004, and between 52% and 55% for part-time employees in the same period.
* D’Arcy, C. and Finch, D. (2016) Calculating a Living Wage for London and the rest of the UK. London: Resolution Foundation.
** This number is due to rounding.