Number of low paid jobs in London increases for 4th year running

 Almost 1 in 5 jobs in London are now low paid

Number of low paid jobs in London increased 45,000 last year

New analysis from New Policy Institute – funded by independent charity Trust for London – gives the latest data on low pay in the capital. The figures are available on the London’s Poverty Profile website – which provides data on over 60 poverty indicators.

The research looks at the number of people and the number of jobs paid below the London Living Wage (LLW).It shows that in 2013, around 18% of all jobs in London were low paid, up from 17% in 2012 and 12% in 2009.Meaning that over 1 in 5  (around 21%) of employees living in London were low paid in 2013 up from 20% in 2012.

Number of low paid jobs

 In 2013, there were just over 640,000 low paid jobs in London – this represents an increase of 45,000 or 7.5% on 2012. This increase reflects a trend across England – the cost of living is growing faster than earnings, so as prices increase, more jobs fall below the low pay threshold.

Low pay by sector

 27% of all low paid jobs are in the retail and wholesale sector and 22% of all low paid jobs are in hotels and restaurants – together accounting for almost half of all low paid jobs in London (49%) – up from 45% in 2010.

Low pay risk by hours

 Most of the increase in the number of low paid jobs since 2009 was among men in full-time work (up 77,000) and women in part-time work up by (67,000).

The risk of low pay varies considerably by hours. In 2013, 43% of part-time jobs were low paid compared to 11% of full-time jobs.

There is also a clear gender dimension when it comes to low paid work. As most part-time jobs are done by women, the number of women in low paid jobs is higher than the number of men. A third of low paid jobs in 2013 were done by women working part-time (214,000).

Low pay by borough

Overall 24% of jobs located in Outer London were low paid, compared to 13% in Inner London. In 12 London boroughs a quarter or more of the jobs were low paid. All but one (Lewisham) are in Outer London. The proportion of jobs that are low paid is highest in Harrow (33%) and Bexley (33%), followed by Waltham Forest (31%).

The proportion of residents paid less than the LLW was highest in Newham (37%) followed by Brent (32%). The borough with the lowest proportion of residents in low paid work was Richmond (11%).

Low pay by ethnicity

Low paid work is most prevalent amongst employees of Pakistani and Bangladeshi origin (with 44% of employees paid below the LLW). For those of Black African origin more than 2 in 5 (41%) were low paid.

The likelihood of being in low paid work in London is lowest among those of a White British background.

Low pay by age

Between 2011 and 2013 over half (53%) of working 16 to 24 year olds were paid below the LLW.

Young adults have also seen the biggest increase in rates of low pay (up by 7 percentage points from 2008-2010 to 2011-2013).

For all other age groups, the proportion paid less than the LLW was between 18% and 21%.

Commenting, Mubin Haq from Trust for London, said:

“There is lots of talk of an economic recovery and of course that is welcome news. But we need to look at more than GDP and employment figures. The true measure of a recovery should be what it means for those nearest the bottom.

“With a 7.5% increase in the number of jobs that are low paid, these new figures suggest that for many poorer Londoners, working hard is not lifting them out of poverty.

“This can and must change. Employers can do a number of things to help, such as redesigning jobs so workers have more responsibility, enabling greater productivity and allowing for increases in pay. Moreover, many employers can afford to pay at least a Living Wage of £8.80 an hour – by doing so they can reap the associated business benefits such as increased loyalty and lower staff leaving rates.”

Ends

Notes to editor

  1. You can find the graphs and data here: http://www.londonspovertyprofile.org.uk/indicators/topics/low-pay/Low pay 
  2. Low pay means being paid below the London Living Wage, which is an hourly rate that is set independently and updated every year by the GLA. It is set according to a combination of the costs of living in London and 60% of the median wage.
  3. The London Living Wage in 2013 was £8.80.
  4. London’s Poverty Profile is an independent data source providing data on over 60 poverty indicators.
  5. Trust for London is the largest independent charitable funder of projects tackling poverty and inequality in the capital. The Trust makes grants totalling over £7 million per year, supporting around 400 voluntary and community organisations in London at any one time. The Trust has funded a number of projects focused on tackling low pay.
  6. The New Policy Institute (NPI) is a UK research institute, which produces evidence-based research on a range of social and economic issues. For more information visit www.npi.org.uk. NPI is on Twitter at @NewPolicyInstit.