Mayor Boris Johnson has announced an increase in the London Living Wage to £9.15 per hour – up from the current £8.80.
The voluntary scheme, championed by the Living Wage Foundation, aims to ensure workers receive a high enough wage to enjoy an adequate standard of living.
Studies suggest staff paid the living wage have a better opinion of their employers and that businesses enjoy higher staff retention rates.
Today’s increase means those who work for participating employers earn significantly more than the £6.50 per hour guaranteed by the National Minimum Wage.
In the past 12 months the number of London employers joining the scheme has grown from 214 to over 400, with ITV, Nationwide and Google among the latest to become accredited.
Mayor Johnson said: “The London Living Wage rewards hard working Londoners for their valuable contribution to the productivity and growth of this city’s economy. It is a win-win scenario for the workforce and employers alike.
“Importantly, this isn’t just about economic dividends, but the immeasurable improvement to quality of life and workplace morale.”
Rhys Moore, Director, Living Wage Foundation said: “London is leading the way in championing the Living Wage, and the leadership shown by the Mayor of London has been key to this success. As the recovery continues it’s vital that the proceeds of growth are properly shared. The London Living Wage reflects the unique challenges of working and living in one of the world’s most expensive cities.
“Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process.”
Some campaigners and politicians want the living wage to replace the National Minimum Wage as the legal minimum any employee should earn.
Green Party London Assembly Member, Baroness Jenny Jones, says despite the increase in participating employers, nine of out ten big firms in London are still not signed up.
Baroness Jones commented: “The living wage campaigners have been brilliant at getting some employers to voluntarily sign up.
“But we can’t leave more than half a million Londoners on grotesquely low wages, so we need the living wage to become mandatory. Everyone should be paid enough to build a life on, the national minimum wage just isn’t enough in London.
“I’m urging the Government to quickly phase this in, starting with the big businesses who can most afford it.”
Stephen Knight AM, Liberal Democrat London Assembly business spokesperson, commented: “In reality even the minimum wage is not paid by some employers, including scandalously by many local councils up and down the country who outsource care services to companies that only pay care workers for the visits they make, and not the real hours they work.”
“A cursory glance at some leisure centre websites also shows some jobs being advertised in London with pay rates well below the London Living Wage by leisure contractors who are employed by London boroughs that boldly claim to be signed up to the full adoption of the London Living Wage.”