5-year rise in low pay in London finally halts

But huge jumps over the decade: in 2006 6% of full-time jobs were low paid, it’s now 12%. In 2006 30% of part-time jobs were low paid, it’s now 43%.

New analysis from New Policy Institute – funded by Trust for London – gives the latest data on low pay in the capital. The full figures with graphs are available on our London's Poverty Profile pages  – which provides data on over 60 inequality and poverty indicators.

The number of low-paid jobs in London has fallen very slightly in 2016, in contrast to the previous five years of increases. At 720,000, however, there are still twice as many low-paid jobs as in 2006, a period in which total employment rose by 20%. This means that the rate of low pay has increased by almost two-thirds since 2006, from 11% to 18%, so that in 2016 almost 1 in 5 jobs in London were low paid.

Low pay risk by hours

In 2016, 350,000 part-time jobs were low paid, equal to 43% of all part-time jobs. This is a decrease of two percentage points from the previous year. However, a decade earlier in 2006, 30% of part-time jobs were low paid, meaning significant increases over the period.

In 2016 370,000 full-time jobs were low paid, equal to 12% of all full-time jobs in London. This is almost double the proportion that were low paid in 2006.

The proportion of part-time jobs that are low paid has been increasing for around a decade, although not continuously. In comparison, the proportion of full-time jobs that are low paid started increasing around 2010, around the period real earnings began falling in London. This reflects, among other things, the increasing cost of living in London, which is included in the London Living Wage calculation.

Low pay by borough

In 2016, the five boroughs (Bexley, Harrow, Enfield, Sutton and Waltham Forest) with the highest proportion of jobs paid below the London Living Wage are all in Outer London. In these boroughs, over 30% of jobs are low paid.

The five boroughs (Tower Hamlets, Islington, Southwark, Camden, and Westminster) with the lowest proportion of jobs paid below the London Living Wage, are all in Inner London. None were over 15%.

Many boroughs have experienced relatively large changes in the number of low-paid jobs compared with 2013-14. For example, mostly Outer London boroughs such as Sutton, Merton, Havering, Redbridge, Barking & Dagenham and Barnet all saw increases of five percentage points or more.

Of the five boroughs (Waltham Forest, Enfield, Barking and Dagenham, Brent and Newham) with the highest proportion of low-paid residents, four are in Outer London, with three in the Outer East & Northeast. The borough with the highest proportion of low-paid residents is Newham (34%), in Inner London.

Low pay by sector

27% of low-paid jobs were in the retail and wholesale sector

and 21% of low-paid jobs were in hotels and restaurants in 2016.

64% of jobs in the hotel and restaurant sector were low paid

and 29% of jobs in retail and wholesale were low paid.

Only 10% of jobs in private sector services were low paid

but as this is a large sector of employment, these make up over a fifth of all low-paid jobs.

Low pay by gender

In 2016, the biggest group among the low paid were female part-time employees

with 220,000 or 31% of the total.

Between 2011 and 2016, the group that recorded the largest increase in the number of low-paid jobs, was women

working full-time, with 80,000 more women low paid.

58% of low paid jobs in London are carried out by women.

In 2016

“No further increase in the proportion of low-paid jobs in London is welcome. However, low pay rates are still higher than a decade ago, and particular employment sectors have a very poor record that must be addressed.”
Adam Tinson, Senior Researcher from NPI
“London has seen a significant growth in jobs over the last few years. Unfortunately, too many are low paid. Sadiq Khan has made a positive commitment to making the capital a Living Wage city. This data shows that whilst there has been a halt in the rise in low pay, there is still a long way to go to making sure Londoners are paid fairly. Nearly 3,000 employers have committed to paying a Living Wage, with more than 1,000 in London accredited with the Living Wage Foundation. That’s a great step in the right direction but many more need to sign up. Not only is it good for employees but it’s also good for companies, with clear evidence that retention rates improve.”
Mubin Haq, Director of Policy & Grants from Trust for London
“The Mayor is determined to tackle low pay across the city so that all Londoners are able to benefit from the capital’s economic prosperity. He is pleased that the number of low-paid jobs in London has fallen but recognises much more needs to be done. That is why he passionately supports the London Living Wage, which now has more than 1,000 businesses accredited and has tasked his deputy mayor’s with rooting out bad employment practices at City Hall and across Mayoral bodies.”
Rajesh Agrawal, Deputy Mayor of London for Business

The full data is available on the London's Poverty Profile section of the website.