Mayor Boris Johnson has announced that the London Living Wage will increase from £8.55 to £8.80 per hour.
The LLW is a voluntary scheme championed by the Living Wage Foundation, part of London Citizens and reflects the hourly rate a worker needs to be paid in order to have an adequate standard of living.
There are now 214 London employers taking part in the scheme, including the National Portrait Gallery, Pearson and Oxfam.
Research from Queen Mary University shows employers paying the LLW enjoy higher staff retention rates and greater levels of staff satisfaction.
The wage has been increased each year since 2005 and City Hall says the annual increase has “put around £235 million into the pockets of lower paid Londoners.”
Announcing the latest rise, Mayor Johnson said: “Paying the London Living Wage ensures hard working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too.
“This in turn is good for London’s productivity and growth. It is extremely heartening to see major new companies signed up this year but we need more converts. I hope we can spur on even more organisations to do the right thing.”
Rhys Moore, Director of the Living Wage Foundation said: “Employers who choose to pay the Living Wage are going that bit further and helping their workforce in challenging times.
“By looking out for the Living Wage badge you can now choose to support businesses and charities that are doing right thing. It works just like Fairtrade and will grow even faster with consumer support.”
The London Living Wage is backed by all political parties at City Hall, although some London Assembly members want the scheme to become mandatory and replace the National Living Wage.
Green Party Assembly Member Baroness Jenny Jones said compelling firms to pay the LLW would “free up billions” by ending the need for Tax Credits and top-up benefits.
She suggested the money saved would allow the Mayor “to invest in job creation schemes like housing and renewables.”
Labour’s Fiona Twycross AM said that a mandatory LLW “could be phased in to help smaller businesses and give people time to prepare.”
She warned that at current adoption rates, “it will take 450 years for all workers to be paid a living wage in London.”