Closing the Low Pay and In-Work Poverty gap

Low pay is defined by the Nuffield Foundation as pay that is less than two-thirds of the average median hourly earnings. In-work poverty occurs when a working household’s total income does not meet their needs. The latest available data for London’s Poverty Profile shows that 1.3 million Londoners in poverty live as part of a working family, which is a 50 per cent increase over the last decade [2].

Today, the London Assembly Economy Committee published a report “Low Pay and In-Work Poverty: Steps to help Londoners struggling to make ends meet” which lays out the circumstances and factors that are denying Londoners the opportunities for decent livelihoods, for themselves as well as their families.

The report makes a number of recommendations including:

• The Mayor should include supporting transition back into the labour market as one of the listed priorities in the Skills for Londoners Innovation Fund prospectus for future rounds of funding applications, with a focus on groups at risk of being in low paid work or in in-work poverty. The Mayor should include this in the next fund prospectus.
• The Mayor should provide a commitment and timeframe for establishing a working group tasked with looking into and developing solutions to the challenges present in the low pay sectors of London’s economy.
• The Mayor should produce a plan for encouraging more businesses to sign up to the Good Work Standard.

Leonie Cooper AM, Chair of the Economy Committee, said:



“It’s shameful to think in 2020 there are still Londoners in low pay and in-work poverty. Since 1994/95, the proportion of working Londoners in poverty has risen from 15% to 24% in 2017/18.

“Our report found that the number of employers not paying the National Minimum wage is on the rise. Data from the Low Pay Commission indicates that as many as 439,000 people were paid under the National Minimum wage, with women more likely to be underpaid than men. We have called on the Mayor to take concrete action to address the non-compliance of the National Minimum Wage across London.

“We also called on the Mayor encourage London businesses to sign up to the Good Work Standard. Currently, only 49 businesses have been accredited by the Mayor’s Good Work Standard out of over 500,000 businesses across London. Our report recommends that the Mayor must set out a strategic approach to encouraging its adoption.”