London Living Wage rises amid higher cost of living 'but more must be done on ethnic pay gap' says mayor

Sadiq Khan announced a landmark increase in London Living Wage to "bring relief for thousands" while slamming the "ethnic pay gap".

The new London Living Wage is £10.20, up from £9.75 and reflects the rising cost of living in the capital.

Employers can voluntarily sign up to the pledge which ensures all workers are paid at least the London Living Wage, with 1,502 businesses already signed up.

While announcing the increase on Monday (November 6), the mayor highlighted the disparity in pay between ethnic groups.

Mr Khan said: “London is one of the most dynamic and prosperous economies in the world, but unfortunately this prosperity isn’t shared by all Londoners.

"In the capital today, more than two million people are struggling to make ends meet and the ethnic pay gap is shockingly and unacceptably large.

“I want to make sure that no one who goes to work every day should have to endure the indignity of poverty."

The comments came after research revealed that 46% of Bangladeshi and Pakistani workers and 35% of black, African, Caribbean and black British employees are paid less than the London Living Wage, compared to 19% of white British in low paid work.

The median pay for white ethnic groups was also much higher, at £16.23 per hour, compared with £13.46 per hour for all black, Asian, and minority ethnic (BAME) groups.

This is the second rise in the London Living Wage under Mr Khan, having previously gone up from £9.40 to £9.75.

The rise this year is the first time the figure has exceeded £10 and was calculated by analysing the changing retail prices of an average basket of goods.

Around 60% of Londoners living in poverty are in working households, compared with less than a third of Londoners 20 years ago.

While the living wage provides low paid workers with a decent standard of living, it helps employers with a more motivated, healthier and happier workforce.

Director of the Living Wage Foundation, Katherine Chapman, said: “In-work poverty is today’s story.

"New figures out yesterday show that 5.5 million people are still paid less than the real Living Wage – it’s fantastic that this year alone over a thousand more employers have chosen to go beyond the legal minimum and pay a real living wage, putting fairness and respect at the heart of their business.

“Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real living wage brings big benefits.

"Nine out of 10 accredited Living Wage employers report real benefits including improved retention, reputation, recruitment and staff motivation.”

Nationally, the living wage also increased by 30p to £8.50 an hour.

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