Making London a Living Wage City

Trust for London is committing to tackle in-work poverty by investing a further £4.8 million in the London Living Wage campaign over the next four years, to ensure all Londoners earn a real Living Wage. Project lead Klara Skrivankova explains why making London a Living Wage City now is more important than ever.

Living in London is expensive. Yet many jobs in the Capital do not pay enough to secure its residents a decent standard of living. This disparity leads to London ranking highest in poverty levels in the country: 27% of Londoners are in poverty and 49% of those are in poverty despite having a job.

That's why we are investing a further £4.8 million in the London Living Wage campaign over the coming four years, building on over £1 million committed since 2007.

Living Wage campaign phase two

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The Living Wage campaign has shown that sustained, collaborative, peer-led pressure can bring positive change. It has also proven that securing powerful allies, and demonstrating an enticing business-case alongside positive social impact can incentivise sector-wide adoption. We are proud to be supporting the campaign as it celebrates its 20th anniversary.

However, it is clear that the work is not finished. Low-paid Londoners still struggle to make ends meet in a city with sky-high living costs. Many are in precarious jobs and the number of workers on zero-hour contracts has doubled in the past seven years.

There are an estimated 780,000 jobs in London still paid less than the real Living Wage. Living costs are rising and, while current labour shortages might increase pay for some, it is unlikely that high wages and secure jobs will become a norm in the near future without social and political pressure.

A proven tool for civil society

The Living Wage established the minimum that a person needs to earn to have a decent standard of living. Its annual rate is calculated on living costs and that is why the London Living Wage rate is higher than everywhere else. By contrast the government’s national living wage is the minimum employers are required to pay by law. There is only one rate for the whole country, with no allowance for the disproportionately higher costs of living in the Capital.

One of the successes of the campaign is that the Living Wage principle is now widely accepted. It contributed to the government re-branding the national minimum wage as the national living wage in 2015. However, the government does not link its calculation to the real cost of living and its rate remains below the real Living Wage. It is also only payable to those over aged 23, leaving out hundreds of young workers.

A powerful alliance

Change that lifts people out of poverty is most powerful when it happens through collective actions of individuals and organisations, led from the grassroots up. The Living Wage campaign is an example of this. But sustaining the pressure to obtain further progress requires resources, and that is why we are committing significant funding to this work over the next four years.

Led by a powerful alliance between civil society, faith groups, public bodies, businesses of all sizes, and politicians, we hope to see £635 million increase in wages, more workers gaining security through the Living Hours scheme and more local authorities join those already accredited and exercising leadership through their procurement.

Sustaining the pressure to obtain further progress requires resources, and that is why we are committing significant funding to this work over the next four years.

We also recognise that low pay is often a reality in the charitable sector. We will work with our peers in the Living Wage Funders network to support more civil society organisations to become accredited Living Wage Employers.

A living wage is good for business

Most accredited organisations agree that Living Wage is not just the right thing to do, but it is also good for business, leading to better staff motivation, retention and brand reputation. While some still need persuading about the business case, many now see investment into workers as fundamental for business sustainability.

I recall a conversation with a senior executive from a large accredited business a few years ago. He told me that some of his peers say they would like to pay the Living Wage, but that their business can’t afford it. His view was that this was often used as an excuse and that the decision was down to values and leadership. His message to hesitant peers was – if you want to stay in business, you cannot afford not to pay the Living Wage.

It is about recognising that in a fair society no one working full time should be earning less than they need to live, and challenging organisations to pay their workers adequately.

Indeed, with the shift towards stakeholder capitalism, investors increasingly scrutinise businesses on employee working conditions. The real Living Wage is one of the tangible metrics that companies can use to demonstrate their social performance to investors. But the campaign is not just about providing companies with metrics. It is about recognising that in a fair society no one working full time should be earning less than they need to live, and challenging organisations to pay their workers adequately.

We want to see all London workers earning at least the London Living Wage now. Find out more about how you can commit to this as an employer here.

15 November 2021

London Living Wage

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